While many small businesses think their employees are financially unprepared for retirement, few are offering a plan to help, according to a Harris Interactive survey. Employees who cannot obtain a retirement plan or life insurance coverage through their employer should start saving and addressing their future needs themselves.
About 19 percent of small business owners offer their employees a 401 (k) or a similar retirement plan, even though roughly 75 percent of employers say they believe the financial unpreparedness is at crisis level in the United States. Sixty-nine percent say their company is too small to offer a plan, and 11 percent say they are likely to offer a plan in the next couple of years.
“Our survey found that nearly half (46 percent) of small business owners were not aware or were unsure that an employee self-funded retirement plan could be offered without having to match employee contributions,” said Anne Arvia, senior vice president of retirement plans for Nationwide Financial, adding that she believes the Small Business Add Value for Employees Act, which is before Congress, will remove barriers inhibiting businesses from offering a good retirement plan for employees.
Seventy-one percent of business owners say they want the option of matching or not matching employee contributions into a retirement plan, according to the Harris survey. Either way, small business employees should take their financial future into their own hands and plan for retirement with things such as a life insurance policy.