While more than two-thirds (69 per cent) of U.S. small- and medium-sized employers say the main reason they offer a retirement savings plan is to help employees save for the future, nearly half say they do so to help retain (47 per cent) and attract (40 per cent) top talent, according to a new survey by Capital Group.
The survey, which polled more than 600 SMEs, found while 65 per cent said they don’t currently offer their employees a retirement savings plan, 75 per cent said they intend to introduce a plan within the next two years and 13 per cent said they’ll likely launch one in the next six months.
However, respondents noted there are some barriers that prevent them from offering a retirement plan, such as the belief that their company isn’t large enough or stable enough to afford one (40 per cent), limited administrative resources (35 per cent) and uncertainty on how to introduce a plan (32 per cent).
“Our findings reveal that the passing of the SECURE 2.0 Act in late December 2022 marked a significant stride towards enabling more small business owners and employees to pursue retirement stability, though barriers remain,” said Renee Grimm, Capital Group’s senior vice-president of retirement plans, in a press release.
“We’re seeing forward momentum, but something is holding small business owners back. Many seem to be on the cusp of offering their employees a plan and may simply need the guidance of a financial advisor to utilize and maximize the benefits available to them.”
Read: Survey finds 74% of workers say it’s important for employers to offer retirement savings options