Smaller-business employers support offering retirement benefits themselves and policy initiatives to increase private-sector workers’ savings, according to a national survey released Wednesday by The Pew Charitable Trusts.
Pew researchers surveyed more than 1,600 small- and medium-sized businesses employing up to 250 workers, including those with and without retirement plans offered at work. The average firm size was 28 employees, and 68% had five to 24 employees.
For those not offering plans, the most common reasons were cost, limited administrative resources, and lack of employee interest. In that group, 71% cited “too expensive to set up” as a reason, while 37% said it was the main reason.
When asked about state initiatives to set up private-sector retirement savings programs, half of the employers without plans said they would start their own plan if a state had such a program; only 13% of employers sponsoring plans said they would drop their current plan.
Factors that could persuade employers to offer a plan included greater profitability, financial incentives and increased demand from employees, Pew researchers found. Many employers without plans said they would support auto-IRA plans because it would help their employees.
“A significant number of smaller employers have been thinking about it,” said John Scott, director of Pew’s retirement savings project, in an interview. “Small-business owners, particularly those without plans, do welcome options. State auto-IRA proposals could, in fact, be a nice complement” to what small employers might consider offering.
The report about the survey, “Small Business Views on Retirement Savings Plans,” is available on Pew’s website.