A recent study conducted by Harris Interactive found that only 14% of small-business owners offer a 401(k) plan to their employees, and 63% do not offer any retirement benefits at all. With small businesses employing half of all private-sector employees, their inability or lack of desire to provide retirement options to their employees can have a significant impact on the workforce and their preparedness to deal with retirement.
Reasons cited as to why small-businesses do not offer retirement benefits included:
- Didn’t have enough employees to make it worthwhile – 54%
- Financial inability to match employee contributions – 28%
- Unstable business circumstances – 26%
While setting up a retirement program for a small-business can be time-consuming, it does have its benefits. The primary one being that it can make your company more competitive with larger companies that offer such benefit packages to their employees.
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