Alexander Calls For Best Ideas On “Simple Plan For Voluntary Savings That Employers Would Be More Likely To Adopt”

Thursday, January 31, 2013

At a hearing Thursday of the Senate Health, Education, Labor and Pensions Committee on retirement savings, ranking member Senator Lamar Alexander (R-Tn.), asked four expert witnesses to “start from scratch” and offer the committee a simple plan for voluntary savings that employers would be more likely to adopt.

“Because of the problems of complexity, legalese, and liability, there seem to be plenty of opportunities to make it easier for employees to choose plans to adequately save for their retirements,” Senator Alexander said. 

Senator Alexander suggested that the plan include automatic enrollment and automatic increases in levels of savings in order to increase the amount of money that employees would have for their retirement – in a case of automatic enrollment or increase the employee would immediately be able to opt-out of the contribution if the employee chose to do so, for whatever reason.

He said that Social Security and the current number of private savings plans are not going to be enough to provide adequate retirement for many Americans --- just 68 percent of private-sector workers are employed at establishments that offer one or more retirement plans, according to the National Compensation Survey from March 2012.

“More and more Americans are becoming independent contractors or part-time employees and are not working for a company that will offer the plans,” he said.

He cautioned against new mandates on businesses saying, “small businesses are struggling with the cost of the health care law and cannot tolerate any new mandates to provide automatic savings accounts.”

Providing an example at the hearing, Senator Alexander said he recently met with a franchise group that owns nearly 20 fast food restaurants. The company, which has 542 full-time employees, faces 6.2 percent Social Security and Medicare taxes for each employee, a menu labeling mandate that costs $1,000 per restaurant, minimum wage mandates that cost nearly $25,000 a year, and paid sick leave mandates.

The health-care mandates will increase their costs: “They tell me they offer health care to all of their 542 employees but only 34 take it. If nothing changed next year—that is, if the health care law didn’t come into effect—they would still be spending more than $94,000 in health care. Under the health care law, if they opt to pay the penalty, they’ll be spending $1 million, instead of $94,000. That exceeds their entire net profit for the year 2013. If they were to decide to continue to offer health care, their costs would be between $400,000 and $1.4 million. You could apply the same sort of reasoning and statistics to a smaller company and come out with a similar result.”

 


Haslam Receives Employment First Task Force Report

Governor Bill Haslam announced the completion of the Employment First Task Force report that outlines the steps the task force will take to expand integrated, competitive employment for people with disabilities as well as progress the group has already made. Formed last year when the governor signed Executive Order No. 28, the task force is comprised of state agencies, families, ... (click for more)

Chattanooga Business Calendar Sept. 21-27

Tuesday, Sept. 23 Women and Franchising  8:30-10 a.m. TN Small Business Development Center: 100 Cherokee Blvd. Many organizations and programs recognize the value of women in the franchise industry and there are many programs and incentives available to help women succeed. We will discuss this more during this session along with the following topics:  Why ... (click for more)

EPB Says "Close To A Wash" On City Street Light Billing

EPB President Harold DePriest denied Wednesday that EPB owes the city over $1 million on street light billing. He stated,  “EPB has never said that we owe the city $1.2 million. When all the facts are taken into account, the financial difference is close to a wash.” Mr. DePriest said, "I regret that this complicated issue has been oversimplified in some reports. As we’ve ... (click for more)

New Red Bank Zoning Ordinance Is Ready For Review

The new Red Bank zoning ordinance is ready for review, City Manager Randall Smith said Tuesday night. It can be seen on www.redbanktn.gov and the link to zoning regulations. The new ordinance will replace one that was created 30 years ago.    The plan will encompass both residential and commercial development and is intended to direct ... (click for more)

Why So Much For A Rail Study?

From the things that make you go hmm department. Ok, so the feds are giving us $400k and the city is kicking in another $300k for a total of $700k to do a study on having in town rail service. Why so much for a study? Don't get me wrong, I'm totally down with Chattanooga having some passenger trains running around. I get that. It's awesome. We've needed it for a long time. I ... (click for more)

Roy Exum: My Aunt Martha

During my first year at Ole Miss, I was so distracted by the stunning coeds on campus that I paid too much attention to the wrong kind of figures. I ended up flubbing a math class, which at the time was most serious and potentially deadly for an American boy. It meant I didn't have enough credit hours to avoid the draft and in almost no time I got a red, gut-retching postcard that ... (click for more)