Many small-business owners say that they want to offer their workers a retirement plan but obstacles are holding them back. Wednesday, a Senate panel said it would introduce legislation to help address the problem.
People who work for smaller businesses face big challenges in saving for retirement. Only 36 percent of those who worked for businesses with 10 to 100 employees last year had access to a company retirement plan, the Employee Benefit Research Institute says. The lack of a company-sponsored plan affects 71 percent of businesses with fewer than 25 employees, the Government Accountability Office said in a 2009 report.
Small-business owners say they are not trying to avoid a retirement plan. In fact, 37% with more than six employees say they are under pressure by their workers to provide a plan, Nationwide Financial reported in November. And 78% of the owners said they need a retirement plan to better attract qualified employees.
Wednesday, at a Senate Special Committee on Aging hearing looking into the problem, the GAO released an analysis that found general economic uncertainty makes small employers reluctant to commit to such long-term expenses. Employers say they need a certain level of profitability before they would consider sponsoring a retirement plan, the GAO said.
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