Employers and employees at small businesses don’t see eye to eye when it comes to 401(k)s, according to a
The Small Business Annual Retirement Trends Survey found that 64% of employees at small companies believe their employers are obligated to offer a defined contribution plan, only 13% of small companies actually offer a 401(k) plan. Forty-seven percent of small business owners who don’t currently offer a 401(k) plan said they never intend to do so, with the No. 1 reason for not doing so being the wrong assumption that their employees are not interested.
“This report provides a wake-up call for small businesses that, in the past, may have been quick to discount the importance of a retirement program for their employees as well as themselves,” said Stuart Robertson, general manager of the small business group at ShareBuilder. “The data is pretty compelling, as it reveals 80% employees regard the 401(k) as a ‘socially responsible’ thing to do.”
Forty percent of employers believe a retirement plan is helpful in recruiting workers, but 60% of employees believe it’s a key recruiting tool. Less than 20% of employers believe that having a 401(k) plan would deter employees from leaving the company, but 40% of employees believe it would succeed in keeping people put.
The survey also found that 53% of small business owners are very or somewhat confident about their retirement savings, but only 41% of their employees are. Employers invest in IRAs, stocks and mutual funds to fund their retirement, but employees rely on 401(k)s, the survey also found.
Harris Interactive conducted the survey in July and August among 519 small business owners and 1,147 full-time employees.
