"The proposed legislation seeks to reform the pension system to provide for greater worker protections and more transparency in employer-sponsored pension plans. After the rather spectacular failures of several corporate pension plans in recent years as a result of bankruptcies and corporate accounting scandals, the need for the bill seemed pretty clear.

Since they were working on pension reform anyway, this might also have given lawmakers a golden opportunity to make the pension system more small business friendly, but that is a set of reforms that didn't happen.

In 2001, the National Small Business Association (NSBA) released an important study entitled The Internal Revenue Code: Unequal Treatment Between Large and Small Firms. Among its findings were several problems for small employers in the nondiscrimination rules governing several kinds of employee benefits plans, including retirement savings plans.

'Currently, the high and largely-fixed administrative costs for starting and running a 401(k) plan are unaffordable for our smallest businesses,' said NSBA President Tod McCracken in response to an emailed inquiry. 'As a consequence, more than two-thirds of individuals working for small businesses have no access to generous federal tax subsidies for retirement savings. SIMPLE plans are much cheaper to administer, but are less generous in the tax subsidy and require mandatory employer outlays.'

The biggest problem for small employers remains the costs of compliance. As with many other kinds of regulations, regulatory compliance costs for small businesses sponsoring pension plans are considerably higher, on a per-employee basis, than they are for larger firms, a finding that was confirmed last month by the SBA's Office of Advocacy. Advocacy found that the per-participant administrative costs of defined-contribution pension plans are 'as much as 14 times more for the smallest firms than for their largest counterparts.'"