# The SAVE Act of 2021: Making Retirement Plans Easier for Small Businesses and Workers

The SAVE Act makes several changes to retirement savings rules, with the main goal of making it easier for small employers to offer retirement plans to their workers. The biggest change allows multiple small employers to band together and share a single retirement plan, similar to how large companies have done for years. This means a small business owner no longer has to set up and manage a retirement plan entirely on their own—they can join with other employers in their area or industry to offer employees the same retirement benefits that bigger companies provide. The law also clarifies the rules so that if one employer in the group doesn't follow all the requirements perfectly, it doesn't automatically disqualify everyone else in the plan.

The bill also makes it cheaper for small employers to start retirement plans. Currently, businesses can get a tax credit to help cover startup costs, but only when they first create a brand new plan. The SAVE Act extends this credit to small employers who join an existing group plan instead, removing a financial barrier that discouraged smaller companies from offering retirement benefits. Additionally, the law provides some relief for people who accidentally don't withdraw enough money from their retirement accounts when they're supposed to. The penalty tax for these mistakes drops from 50 percent to 25 percent, and if people correct the problem quickly, it drops even further to just 10 percent.

The bill also expresses Congress's support for employee stock ownership plans (ESOPs), which allow workers to own shares in their company. These plans have helped millions of Americans build retirement savings while working for companies that are partially or fully owned by their employees. Overall, the SAVE Act is designed to expand retirement savings opportunities for workers at smaller companies by reducing the complexity and cost of offering these plans.

SAVE Act of 2021

Kind, Ron

Savings for All Vocations Enhancement Act of 2021 or the SAVE Act of 2021 This bill modifies provisions relating to tax-exempt retirement plans. It (1) allows employers who establish a tax-exempt 403(b) pension plan to participate in a multiple employer plan, (2) allows employers who join an existing pension plan to take the tax credit for small employer pension plans start-up costs, (3) makes certain findings relating to S corporation employee stock ownership plans (ESOPs), (4) reduces the excise tax on certain accumulations in tax-exempt retirement plans and on failures to take required minimum plan distributions, and (5) sets forth a statute of limitations rule for purposes of the excise tax on excess plan contributions and accumulations in connection with an individual retirement plan.