Small business owners view having a solid retirement plan as critical, both personally and for employees, according to an survey of 1,000 people by SunTrust Bank. Nonetheless, nearly 40% do not offer one.
The overriding reason why is cost, cited by 90%, perceptions of such plans as being difficult to use (89%), ease of setting up a program (87%), fee transparency (87%) and quality and range of investments available (87%).
There appears to be a great disconnect, since 61% believe it is an employers responsibility to offer benefits, 75% said having a 401(k) or other defined contribution plan helps attract and retain high-quality employeesyet only 60% currently offer a plan to their employees. Another 30% have a personal retirement plan, with the 401(k) being the most popular.
Responding to questions about the economy, 41% said the downturn has made planning for retirement more important.
The survey reinforced to us that in this economy, retirement plans are essential to the health of businesses, families and communities, said Brenda Seliga, senior vice president and head of employee benefit solutions at SunTrust.
In conjunction with releasing the findings of the survey, SunTrust announced Online 401(k), a new web-based DC administration plan aimed at small business owners. Sponsors can set up a plan in less than one hour, especially with the help of specialists available to walk them through every step.
Sponsors can choose from 200 investment choices from well-known providers, and receive information on their fiduciary duty, along with annual compliance testing and ongoing monitoring of and information about regulatory changes.
Participants can access savings educational tools online.