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Even in today’s booming economy, many Arkansans are saving far too little for retirement—in part because their employers don’t offer any retirement plans. And many small businesses would like to offer their employees 401(k)s, but the legal liability, cost, and just plain hassle are too much to handle.

That’s why I’ve introduced legislation to lighten the regulatory burden, so more small businesses—whether they’re dry cleaners, nail salons, or local bars—can offer 401(k)s.

This issue demands our attention now because the number of Americans unprepared for retirement is growing. Three items—housing, transportation, and food—make up 63 percent of the average household budget, and they’re getting more expensive, not less. They’re eating up even more of the family budget than they did 20 years ago. As a result, the typical American ages 55 to 62 has only about $14,500 in savings. And consider: Fidelity estimates an average 65-year-old couple should expect to spend $280,000 on health care alone in retirement.

And if they’re planning to depend on Social Security, that’s not a sure bet. Today, 62 percent of all retired workers get at least half of their monthly income from Social Security, and 34 percent depend on it for between 90 and 100 percent of their income.

But a recent report delivered grim news: Just this year, the program started paying out more money than it takes in. And by 2034, the program’s board of trustees estimates it will have completely exhausted its $3 trillion in asset reserves.

Social Security simply won’t be enough to support a comfortable retirement.

To make things worse, fewer employers are offering retirement plans of any kind. In 1979, at least a third of our private-sector workers had defined-benefit plans; today it’s only 15 percent. In fact, today fewer workers have access to any retirement plans at all. In Arkansas, meanwhile, private-sector workers have less access to retirement plans than the national average. And it’s predominantly lower-wage workers who are missing out on the chance to build real wealth.

But there’s an option out there that could do a lot of good: pooled employer plans. If your local nail salon finds it daunting to offer its employees a retirement plan on its own, it could join forces with the local bar or car dealer and offer a common plan to their employees.

There’s just one hitch: Today, only employers who work in related fields can pool their resources and offer a retirement plan, or what’s called a multiple employer plan. But it’d be even better if employers from unrelated fields could do the same. That’s why Senators Orrin Hatch of Utah and Ron Wyden of Oregon have introduced legislation to help different types of small businesses lower their costs and offer what are known as pooled employer plans.

But even if their bill becomes law, there will still be one last roadblock for some smaller businesses: the legal liability. That’s why I’ve introduced a bill, along with Senators Todd Young, R-Ind., Cory Booker, D-N.J., and Heidi Heitkamp, D-N.D., that would shift most of the fiduciary duty of an open pooled employer plan from the small business to the usually much larger investment firms that run these plans.

This small step will give business owners peace of mind and give more Americans the chance to build real, inheritable retirement assets through tax-preferred payroll deductions.

Our legislation is straightforward and common-sense—and it could make a big difference. Those with access to a workplace plan retire with 79 percent of their pre-retirement income, while for those who don’t, it’s 44 percent. It isn’t fair to let 401(k)s be the exclusive province of big companies and white-collar employees.

Making this simple change would allow more people, whether they’re small-business owners or blue-collar workers, to become investors. And it would go a long way toward strengthening retirement security for Arkansans and Americans alike.


Tom Cotton is the junior U.S. senator for the state of Arkansas.

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  • WGT
    July 21, 2018 at 7:19 a.m.

    Single payer healthcare.

  • BoudinMan
    July 21, 2018 at 7:54 a.m.

    That's rich. Tommy Boy saying social security isn't a safe be. You bet your bippie it isn't. Not with the likes of Cotton, er. al., hinting at dismantling the system instead of implementing fixes to keep it solvent. And just who does Cotton-in-his-ears have in mind to manage these large pools of money? Right, the giant banks and insurance companies. Everytime a repug talks about helping the middle class, you can peek behind the curtain to find some large corporate entity waiting to reap the windfall.

  • PopMom
    July 21, 2018 at 8:15 a.m.

    Actually, this is a good bill. I remember in the 80s when a man named Morton who worked for CNA stole millions of dollars of retirement funds in northwest Arkansas and CNA placed most of the blame on the small businesses.

  • PopMom
    July 21, 2018 at 8:19 a.m.

    Of course, Cotton's future is secure. Congress always gives itself generous retirement benefits while wanting to cut benefits for the poor and middle class. Vote the rascals out.

  • GhostOfPaine
    July 21, 2018 at 9:38 a.m.

    A wolf in sheep's clothing is still a wolf. Cotton's feigned concern is simply cover for conservatives' next salvos aimed at killing Social Security through privatization. Why not trust our retirement to the same investment firms who nearly bankrupted this country? What could go wrong? A far, far better solution would be to raise the salary cap on Social Security from its current $128,400 to $250,000, or higher. That is, make folks who pull down more than $128,400 per year live up to their responsibility. Doing so would insure Social Security's solvency for the foreseeable future, if not forever. And, we could begin looking at driving retirement age back down to where it belongs, instead of ever higher. Cotton and his ilk are not to be trusted.

  • TimberTopper
    July 21, 2018 at 10:40 a.m.

    Ghost, why not remove the cap completely. The filthy rich just got a BIG tax cut and also the ending of estate taxes, so total removal of the cap sounds fair to me. It was always something for those around Elvis to state that he was in the 90% tax bracket, that's a far cry from where it is today. Then if you happen to be in investment banking, hedge funds, or(now who would benefit from this) Real estate you get more of a tax break still. Many got tax increases in the great tax cut of the Trump.

  • LRCrookAttorney
    July 21, 2018 at 11:54 a.m.

    GOP..." up to their responsibility."
    Who made them "responsible," and for what? They (meaning most who actually work and earn this money) did things to better themselves and now, they suddenly have some "responsibility" to others that did not (or could not if you choose to believe that).

  • condoleezza
    July 21, 2018 at 1:20 p.m.

    Comrade Cotton ought to write a bill insisting that congress pay back all the money it has pilfered from SS over the years. But he won't. He is too busy comforting Iran and Russia.

  • MaxCady
    July 21, 2018 at 2:07 p.m.

    Raise the amount of taxable earnings to pay for social security.

  • Nodmcm
    July 21, 2018 at 2:38 p.m.

    If the democratic socialist candidates win big in the coming years, Sen. Cotton will have his hands full trying to prevent the top income tax rate paid by the ultra-rich from again reaching 90 percent, as it was during the 1940s and 1950s. The young people today do not see capitalist fortunes in their futures, rather, they see greedy corporations and billionaire investors as enemies of the working people. Ninety-percent income taxes, for example on unearned income over $500,000, and the same rate on large estates, might just make all sorts of liberal social welfare programs very affordable, including single-payer healthcare and beefed-up social security benefits. For this reason, Republicans and conservatives should be careful as they attempt to dismantle social security.