News & Events

President Signs Executive Order Aimed At Increasing Availability Of Multi-Employer Retirement Plans For Small Employers

On August 31, 2018, President Trump signed an Executive Order directing the Department of Labor and the Department of the Treasury to consider issuing regulations that would raise the age when people with traditional Individual Retirement Accounts (“IRAs”) must start taking Required Minimum Distributions (“RMDs”). The Executive Order also directs the Department of Labor to issue guidance or new regulations to make it easier and more cost effective for small businesses to offer retirement plans for employees.

Currently, RMDs must begin at age 70 ½. If an RMD is not taken, the account owner faces a penalty equal to 50% of the RMD. The RMD calculation is based on life expectancy tables issued by the IRS in 2002. The rationale for raising the age at which RMDs begin is that the average life expectancy has increased from age 77 to age 78 ½ since 2002. Those opposed to raising the age at which RMDs begin do so on the theory that most people are not working after age 70 ½ and raising the age for RMDs would encourage individuals to wait to withdraw from their IRAs, thereby decreasing their quality of life.

The Executive Order also instructs the Department of Labor to ease regulations related to Multi-Employer Plans, also known as Association Retirement Plans, in an effort to encourage small employers to offer employees access to retirement plans. It is contemplated that, through reduction of notice and certain filing requirements, administrative burdens will be reduced and the Multi-Employer Plans will become more affordable, and therefore more attractive for small businesses.

What Does This Mean For You? If you are interested in offering your employees a retirement plan, you should be on the look out over the next several months as the Department of Labor may be issuing new guidance or regulations that will improve access to these types of plans.

If you have any questions about this or any other employment or labor law issue, please contact Grace Nguyen Bond at 717-509-7226 or, or Whitney Rahman at 717-509-7237 or

**This update is provided for informational purposes only and
should not be construed as legal advice or as creating an
attorney-client relationship where one does not already exist**