Workplace Culture

Organization Touts New Low-Cost Defined-Contribution Plan

By Staff Report

Mar. 15, 2010

SPARK Institute has proposed the creation of a new low-cost defined-contribution retirement program for employers with fewer than 100 employees.

Under the so-called Universal Small Employer Retirement Savings Program, all plans would use the same government-approved prototype plan documents to hold down costs, according to a summary of the proposal on SPARK’s Web page,

SPARK, a Washington-based organization, is a leading voice for retirement plan services, developing and promoting solutions on critical issues that affect plan sponsors, participants and service providers.

Also according to the summary, investment options would be determined either by the employer or by the service provider as part of its product offering to the plan.

SPARK general counsel Larry Goldbrum said the concept for creating a new voluntary DC plan was spurred by an Obama administration proposal to create a mandatory automatic individual retirement account program.

Under the auto IRA proposal, all employers that currently aren’t offering another retirement plan to their workers would be required to automatically enroll employees in a new IRA plan, with the employees having the option of dropping out.

The SPARK proposal, according to Goldbrum, would give small employers a voluntary alternative to the automatic IRA mandate—assuming the auto IRA program is ultimately enacted into law.

“This would be a way for employers to offer a plan without having to offer a mandatory IRA,” Goldbrum said.

Goldbrum said the USERSP proposal would require legislative approval but that SPARK had yet to line up a legislative sponsor for the proposal. 

Filed by Doug Halonen of Pensions & Investments, a sister publication of Workforce Management. To comment, e-mail


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