• Daibik Chakraborty

Executive Order 13847: Increasing Retirement Security


Overview


Executive Order 1387 aims to increase retirement security for retired Americans by decreasing regulations that burden small businesses


Date of Occurrence: August 31, 2018


Parties Involved: President Trump, Business Owners, Employers, Employees, Retirees, Secretary of the Treasury, Secretary of Labor


Background Information


According to the Bureau of Labor, 34% of the private work sector does not receive access to a workplace retirement plan; 23% are full time workers, the rest are part-time. 89% of workers in private companies with over 500 employees receive access to retirement security from their employers. 53% of workers in private companies less than 100 employees receive retirement security.


According to the Pew Research center, 71% of small and medium sized business are unable to offer retirement security due to high costs. Federal agencies, therefore, are being mandated to remove regulations that financially burden small businesses.


Decision and its Effects


In order to ease costs, multiple employers plans (MEP) should be expanded as it will help reduce costs of managing employee benefits by consolidating the work. This improves effectiveness and efficiency. MEP will allow increased access to retirement security for i for part-time workers, sole proprietors, working owners, and other entrepreneurial workers with non-traditional employer-employee relationships. The Secretary of Treasury will propose changes to business regulations in order to incorporate MEP and satisfy federal tax codes. In addition, it will lay out consequences for employers who adopt MEP who fail to follow the requirements. Secretary of Labor will aid with guidance and implementations of MEP as applicable by law.


The Secretary of Labor and Treasury will work jointly to ensure that retirement security plans are understandable and useful for those who participate, in addition to lowering administrative costs for those companies to implement these program. The Secretary of Treasury will also configure “Minimum Distribution Tables” for retirement funds based on current mortality rates. The Secretary of Treasury will also decide if these updates should be periodic or annual.


Sources:

https://www.federalregister.gov/documents/2018/09/06/2018-19514/strengthening-retirement-security-in-america