Nearly six in 10 small businesses are interested in setting up a retirement plan for their employees within the next three years, according to new research.
Guardian Life discloses this finding in “The Small Plan 401(k) RetireWell Study: What’s Working and Not Working for Small Businesses.”
The report reveals that 46 percent of small businesses do not offer a retirement plan, many among them citing the potential expense as a deterrent. However, 58 percent indicate they are interested in setting up a plan within the next three years.
The inaugural study, prepared for Guardian by Brightwork Partners, identifies the areas within workplace retirement savings plans that small business owners view as functioning well and those that need improvement. The study also highlights key opportunities for financial professionals in the small-plan market, particularly as it relates to the need for fiduciary education and fiduciary support solutions.
“This, coupled with the fact that nearly 30 percent of business owners did not know which type of plan was best suited for their company, illuminates the huge opportunities for financial professionals in the small-plan market,” the survey states.”
The research also reveals that nearly (98 percent) of plan sponsors are either “very” or “somewhat” satisfied with their 401(k) plan. Additionally, 61 percent of plan sponsors who work with a financial professional are “very satisfied” with their 401(k) plan overall compared to only 40 percent of sponsors who are “very satisfied” with their plans and do not use a financial professional.
“This quantifies an industry trend that has been anecdotally apparent for some time, namely that there is a wide gap in plan satisfaction between those sponsors who work with financial professionals and those who choose to go it alone,” the report adds.
Guardian’s study reveals that nine plan sponsors say their 401(k) plans effectively help them to recruit and retain good employees, maintain their competitive positioning and secure an adequate retirement income for their employees.
Based on the survey results, employers also think their plans work for their employees as well. Approximately nine in 10 say their 401(k) eases saving for retirement, provides planning tools, encourages systematic savings and helps employees fund a secure retirement.