After weathering a recession that forced many to curb or cut employee retirement savings plans, small business owners in the United States are offering DC plans at rates considerably higher than five years ago.
Twenty-four percent of small businesses now offer a DC plan for their employees, according to a survey by ShareBuilder 401k. That compares with 10% in 2008.
“A record percentage of small businesses are reporting ownership of a retirement plan—a sign that more small business owners are prioritizing their own and their employees’ need to save for the future,” says the company’s president, Stuart Robertson.
The survey also reveals a shift in how small business owners view their obligation and need to offer retirement plans to employees. Eighty-nine percent of respondents with more than one employee that offer a DC plan say it’s an important factor for attracting and retaining the best talent.
Additionally, 50% of those that offer a DC plan believe offering a plan is their responsibility as a business owner.
Of the 28% of businesses with a DC plan that either stopped offering a match or lowered their match over the past five years, 56% have since reinstated it, and 58% describe their current retirement savings as higher than it was five years ago.
Forty-eight percent of small businesses don’t offer a plan because they don’t have enough employees to make it worthwhile, and 23% say they can’t afford to offer a company match.
Both this year’s survey and the 2008 research polled 500 small businesses from across the U.S. with 50 or fewer employees.
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