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Small Business Owners Not Likely to Offer Retirement Benefits
According to a ShareBuilder press release, only 14% of small businesses surveyed offer a 401(k) plan to employees. Nearly half (46%) said they felt no obligation to offer retirement benefits to employees, while just 17% said they felt a strong obligation to do so.
Reasons cited by respondents for planning to never offer retirement benefits included:
Of those not offering a 401(k) plan, 53% said they would never offer one and 30% were unsure. However, before they ran their own businesses, most small business owners (65%) had retirement benefits offered by their employers.
- not having enough employees to make it worthwhile (54%),
- the inability to afford a company match (28%),
- unstable business circumstances (26%),
- lack of employee interest (15%), and
- a short-term employee base (15%).
In addition, 61% of those surveyed said they have never heard of the Pension Protection Act. Of those that have heard of the legislation, 76% said it had no impact on their likelihood to offer a 401(k) plan.
Other SBART findings included: The survey was conducted online within the US by Harris Interactive on behalf of ShareBuilder 401(k) between Oct. 4-23, 2006 among 507 small business owners or small business CEO’s/Presidents (aged 18 and over) who employ 50 employees or fewer, including one-person, owner-operated businesses.