Sixty-six percent of small businesses do not offer their employees a 401(k) plan, according to the August 2016 SurePayroll Small Business Scorecard.
Forty-two percent of these companies say they do not see the value in it, 35% say the fees are too expensive, and 23% say they do not know how to manage a 401(k).
Only 28% of small businesses offer a 401(k), with 6% planning to add one soon. This runs counter to the 34.4% who say that a 401(k) plan is the primary way they will save for retirement, followed by earnings from their business (24.7%), a traditional or Roth individual retirement account (13.7%), real estate investments (not including their home—9.3%), and stocks, bonds and cash outside of a retirement account (8.9%).
Among the small businesses that are offering a 401(k), only 5% say they are doing so to attract new employees, and only 6% value the tax breaks.
“There needs to be more education for small business owners about the tax benefits and the long-term growth potential of investing in a 401(k) plan,” says SurePayroll General Manager Andy Roe. “The fees really are minimal when you consider the benefits to you and your employees. The plans available today make it very easy to manage, and your payroll provider can help guide you. It’s a growth opportunity for business owners.”