Fifty-one percent of small business companies with 10 or more employees have researched offering a 401(k) plan, according to the Millennium Trust Small Business Retirement Survey.
Fifty-five percent of small businesses looked at a retirement plan but didn’t decide to offer anything, and 45% have spent no time researching retirement programs.
Twenty-two percent say their lack of knowledge about retirement savings options is the biggest barrier for adoption, signaling an opportunity for advisers. Twenty-three percent have researched other types of workplace benefits.
Only 23% of small businesses think that offering a retirement plan would help them attract and retain workers.
Nonetheless, 70% are planning to offer a retirement savings program within the next two years, and 86% say such a program is much more attractive if it does not impose any additional costs to the company. Seventy percent are willing to share in the cost, up to $60 a year per employee. Seventy percent said they also would be interested in a retirement savings program if it also allowed them to save for retirement.
Ninety-three percent of small business owners and 95% of employees say that Americans are not on track to have enough money saved to maintain their lifestyle in retirement. Twenty-five percent of employees have no retirement savings.
Eighty-eight percent of employees say offering a retirement plan is an important factor when considering a new position, but only 67% of small business employers think that offering such a benefit is important.
Ninety percent of Millennials say that working at a company with a retirement savings plan is important, and 61% say that offering this benefit is an important factor when considering a new employer.
“Our latest survey is a wake-up call for small businesses,” says Gary Anetsberger, CEO of Millennium Trust Company. “Time and again we hear the value and importance employees place on having retirement plans. The misperceptions in the market about costs and limited options are hurting small businesses and employees. Traditional 401(k) plans have been great for Americans, but they aren’t a fit for every business. It’s time employers educate themselves on other viable savings solutions that can increase retirement readiness for Americans.”