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business Tuesday 17 November 2020

Liz Weston: How small businesses can help workers save

By LIZ WESTON of NerdWal- to a retirement plan, for out annually, McNeill says.
let example, if they’re offered Those lower fees open up a
Donna Skemp of Bend, payroll deductions, ac- way for employers to help
Oregon, struggled to save cording to AARP’s Public workers save. Instead of
before she signed up for Policy Institute. In addition, paying $1,500 to $2,500 a
an automatic savings plan 7 of 10 working adults say year in administrative costs
offered by her employer’s they probably would par- for a 401(k), which McNeil
payroll services company. ticipate in an emergency says is typical for her clients,
Now, some of her pay goes savings program via payroll small employers could use
into a federally insured, deduction if their employer that money to help match
interest-paying savings ac- offered it. their employees’ contribu-
count that she can access Unfortunately, the smaller tions in the SIMPLE IRA.
any time with a debit card. the business, the less likely Another potential option is
“It’s painless, and it’s so it is to offer a workplace state-sponsored retirement
easy,” says Skemp, ac- savings plan. In the past, accounts, which typically
counting and office man- that made sense, because use payroll deductions to
ager for the nonprofit Ev- the cost of setting up and deposit money into Roth
ery Kid Sports, which pays administering these plans IRAs for employees. Three
sports registration fees for could be high. states — Oregon, Illinois and
children from low-income Technology and compe- California — currently offer
families. tition have lowered costs programs that are or will
Skemp is lucky — more than in recent years, however. eventually become man-
one-third of private-sector Some startups and robo- datory for most employers
workers don’t have access advisors have been tar- that don’t have retirement
to workplace savings plans geting the small-business plans. Several other states
via payroll deduction. 401(k) market, as have are setting up these plans
Many small-business own- some large investment or considering it.
ers may think such plans companies. Costs vary, but ADDING AN EMERGENCY
are too expensive or com- they don’t have to be ex- This undated file photo provided by NerdWallet shows Liz SAVINGS PLAN
plicated to administer. But orbitant: JPMorgan Chase, Weston, a columnist for personal finance website NerdWallet. A big problem with retire-
that’s not necessarily so. for example, recently an- com. Associated Press ment accounts is that they
PAYROLL DEDUCTION nounced a workplace plan can be costly to access in
MAKES A DIFFERENCE for small businesses with SIMPLE (Savings Incentive in these as they can in a an emergency because
Americans don’t save monthly charges that start Match PLan for Employees) 401(k), McNeill notes. The of taxes and penalties.
nearly enough for emer- at $75 a month plus $5 per IRAs, says Mackey McNeill, regular contribution limit for Skemp, 60, learned that
gencies or retirement, but participant. a certified public accoun- SIMPLE IRAs was $13,500 this during the Great Reces-
we’re more likely to save if LOOKING BEYOND 401(K)S tant and personal finance year, compared to $19,500 sion more than a decade
the money is automatically Small-business owners who specialist in Bellevue, Ken- for a 401(k). But SIMPLE IRAs ago, when she lost her job
deducted from our pay- want an even lower-cost tucky, who works with small typically have few fees and and had to raid her retire-
checks. People are much option could set up payroll businesses. regulatory requirements, ment account to pay her
more likely to contribute deductions deposited into Workers can’t save as much with only one IRS form to fill mortgage.q
Walmart sells majority stake in Japanese Seiyu supermarket

merce and global digital its purchase of a small stake demic.
marketing to strengthen in Seiyu in 2002, promising Rakuten and Walmart
Seiyu in the increasingly to bring its “every day low have already been collab-
digital shopping age, ac- price” to Japan. orating, including in online
cording to the statement. Seiyu became Walmart’s shopping and ebook-ser-
Seiyu Chief Lionel Desclee group company in 2008. vice support.
will continue to lead in The Japanese retail market “We look forward to ac-
the transition period, after has often proved a chal- celerating digital transfor-
which he will take on a new lenge for foreign players, mation of Seiyu brick and
role at Walmart, the world’s and Walmart’s arrival was mortar retail and further
biggest retailer. met with skepticism from merging the best of offline
A board will be set up, the start. and online retail,” Kazunori
made up representatives Japanese buyers tend to Takeda, a senior executive
Company signs of Walmart and Seiyu are seen in Tokyo on July from KKR, Rakuten and be finicky and have at times at Rakuten, said in a state-
12, 2018. Walmart, and a new CEO shunned products viewed ment.
Associated Press appointed, the companies as cheap or of poor quality. Seiyu will continue to have
By YURI KAGEYAMA day. said. But that trend has rapidly access to Walmart’s glob-
AP Business Writer KKR & Co., a global invest- The transaction, subject to changed, and discount al sourcing for products.
TOKYO (AP) — U.S. retailer ment firm, will purchase a regulatory approval, is ex- stores are increasingly Scale, in theory, lowers
Walmart is selling off 85% 65% stake, while Japanese pected to close in the first popular as more Japanese prices.
of its wholly owned Japa- online retailer Rakuten will quarter of 2021. seek out bargains. Founded in 1963, Seiyu has
nese supermarket subsid- acquire a 20% stake from Bentonville, Arkansas- The other hot trend all over more than 300 stores across
iary Seiyu, while retaining a Walmart, they said in a based Walmart, which also the world is the move to- Japan employing more
15% stake, in a deal valued statement. runs stores in Europe and ward online shopping, a than 34,000 people. called,
at 172.5 billion ($1.6 billion), KKR and Rakuten will bring other parts of Asia, entered shift that’s accelerated worldwide.q
the companies said Mon- their expertise in e-com- the Japanese market with amid the coronavirus pan-