Nearly 3 in 10 (29 percent) of small business owners who offer 401(k) plans and plan to increase contributions say they are doing so because the Affordable Care Act has made health benefits less attractive to employees.
So reports Nationwide in a survey of 502 U.S. small business owners of companies with fewer than 300 employees, including: (1) 185 small business owners who offer 401(k)’s and plan to increase contributions; (2) 102 small business owners who don’t currently offer 401(k)’s but plan to in the future. Harris Poll conducted the onlne survey on Nationwide’s behalf survey June 10-23, 2016.
The report reveals that more than 4 in 10 (43 percent) of business owners who plan to increase contributions to their company’s 401(k) plan say they are doing so because their plan is now more important for attracting and retaining employees as a result of the ACA.
What Your Peers Are Reading
For business owners who don’t currently offer retirement benefits but plan to start in the future, 23 percent say it is because a 401(k) plan is now more important for attracting and retaining employees as a result of the ACA.
“The changing health care marketplace has created an opportunity for business owners to increase investment in retirement benefits offered to employees,” says John Carter, president of Nationwide’s retirement plans business. “Business owners who help their employees prepare for retirement can differentiate their business as a destination for top talent and a place where valuable workers want to stay.”
Carter says that American workers need help preparing for retirement now more than ever. The survey found that 86 percent of small business owners say America’s workers are facing a retirement readiness crisis. That’s significant because, according to the U.S. Small Business Administration, small businesses (those with 500 or fewer employees) make up 99.7 percent of all employers, employ nearly 50 percent of all private-sector workers (48.5 percent) and create 63 percent of the net new private-sector jobs in the country.