Hidden in the flurry of activity on Capitol Hill two weeks ago was passage of the Small Business Job Protection Act. The measure creates a new retirement plan for small businesses called a savings incentive match plan, or Simple. The President supports the legislation and is expected to sign it into law soon.
Congress designed the incentive plan to appeal to small businesses that want to offer a 401(k) plan to their employees but find the product's appeal limited because of the technical and reporting requirements involved. The new plan addresses many of the concerns small businesses have with 401(k) plans and provides an alternate salary deferral plan.