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Nationwide Survey: Few Female-Owned Small Businesses Offer an Employee-Funded Retirement Plan

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Fewer than one in seven women-owned small businesses offer employees an employee-funded retirement plan, a new report reveals.

Nationwide Financial, Columbus, Ohio, published this finding in a summary of results from an August online survey of 501 U.S. small business owners with 1-100 employees and 202 women small business owners. The survey results are weighted to be representative of U.S. companies with 1 to 100 employees.

The survey finds that only 14% of women-owned small businesses currently offer their employees a 401(k) or other employee-funded retirement plan. And only 5% offer a company-funded defined benefit plan. Of those who plan to enhance employee benefits, the report adds, only 12% say they will add an employee-funded retirement plan.

The survey also finds that women owners who offer a self-funded retirement plan are less likely to offer an employee funded 401(k) than the general sample of small business owners surveyed (46% vs. 59%). But they are more likely than not to offer a SEP (Simplified Employee Pension Plan), with 39% doing so compared to 34% of all owners.

In a prepared statement, Anne Arvia, president of Nationwide Retirement Plans, cites business owners’ uncertainty as to the direction and impact of the economy as a key reason why women small business owners are refraining from investing in employee benefits.

The report notes, however, that nearly two in three (65%) women small business owners are unaware that some retirement plans do not require employers to match employee contributions.

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The report adds that eight in ten (81%) agree that the lack of preparation for retirement in America has reached crisis levels. And nearly half (45%) say that offering retirement plans would help them attract qualified workers.

But 69% say their businesses are too small to offer retirement plans. And over half (53%) say doing so is too expensive.

The report further notes that three-quarters (74%) of women small business owners expect the economy to negatively impact their business in 2012. Just one in five (22%) believe the economy will improve. And one third (34%) expect their sales and revenue to decline.

The report adds that about a third of women small business owners plan to cut back on hiring (37%) and eliminate or delay raises (31%) or bonuses (30%) within the next 12-24 months.

Additionally, nearly one in five (17%) fear they will be forced to lay off employees and only 11% plan to add or enhance benefits in the next two years.