U.S. Rep. Ron Kind (D-Wis.) today proposed new legislation to encourage more small businesses to offer retirement savings plans to their employees.

The Small Businesses Add Value for Employees (SAVE) Act of 2008 (H.R. 5160) would increase incentives for small businesses to start Simple IRA and 401(k) retirement plans, providing more flexibility and reducing administrative burdens.

"A comfortable retirement is something everyone seeks to achieve - whether they work for a big corporation or a small business," Kind said. "But the majority of small businesses don't offer any retirement savings plans to employees because it is often a complicated, costly, and a somewhat risky endeavor. This bill will actually incentivize small businesses to offer savings plans, allowing workers to accumulate retirement savings and helping small businesses attract and retain employees."

Kind's plan drew immediate praise from the business community today.

"The SAVE Act provides simplified and voluntary options for small-business owners to offer retirement savings plans," said Dan Danner, executive vice president of federal public policy for the National Federation of Independent Businesses (NFIB), the nation's largest small-business advocacy group. "We appreciate Congressman Kind's efforts to reduce complexity while helping small businesses and their employees plan and save for their retirement."

"The Simple IRA can be even more effective in getting small employers to maintain retirement plans for their employees if the reforms that Rep. Kind is proposing are enacted into law," said Liz Varley of the Securities Industry and Financial Markets Association. "Through a voluntary incentive, the burdens on small businesses will be minimized and more people will be able to take advantage of tax-deferred retirement plans. We look forward to working with Rep. Kind to advance this important legislation to help small employers and their employees retire comfortably."

The bill would modify the Simple IRA plan by: offering newly participating employers a tax credit for 50 percent of the startup costs and a one-time $25 tax credit for every employee who is enrolled in the savings program; creating voluntary automatic IRAs for employers; removing the higher penalty on early Simple IRA distributions; raising the annual contribution limit for Simple plans to the same level as 401(k) plans; and allowing Simple plan participants to rollover their retirement assets.