Less than half of small-business employers believe retirement plans are crucial to attracting quality employees – but that’s not what the employees believe.
Less than 40 percent of small-business employers responding to a study said retirement plans are crucial for attracting employees, but 60 percent of responding employees said such plans are an important factor.
The No. 1 reason that employers gave for not offering a 401(k) plan was “not enough employees to make it worthwhile,” followed by “can’t afford to offer company match” and “employees not interested.”
The second annual Small Business Annual Retirement Trends survey showed there are significant gaps in the way small-business owners and employees view retirement plans, and there also are misperceptions by employers that make it difficult for advisers to sell 401(k) plans in this arena.
It found that employees were most likely to use 401(k) accounts to fund their retirement, whereas employers were more likely to rely on personal investments such as individual retirement accounts, stocks and mutual funds.
Only 35 percent of small businesses surveyed offered retirement benefits, the study found. Nearly one-quarter of those that did offer a 401(k) plan weren’t actively encouraging their employees to participate.
Meanwhile, 47 percent of small-business owners without such a plan said they “never intend to offer a 401(k).”