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Retirement Planning > Saving for Retirement > 401(k) Plans

Employers Interested in New Retirement Plan Ideas: Transamerica Institute

By Allison Bell

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What You Need to Know

  • Half of employers with fewer than say they already offer some kind of employee-funded or employer-funded retirement benefits.
  • Among employers without a retirement plan offering, 43% hope to add one within the next two years.

Many U.S. employers without retirement plans are interested in adding retirement plans, and some that reject that possibility want to hear about new retirement benefits ideas.

Analysts at the Transamerica Institute, a nonprofit research organization funded by Transamerica and its affiliates, have published data supporting that finding in a summary of results from a survey of about 1,800 U.S. for-profit employers.

What It Means

Figuring out to break into the retirement plan market may be challenging for the retail advisor, but demand is out there.

The plans could be funded with mutual funds, annuities or other arrangements.

The Survey

The Transamerica Institute survey was conducted in 2021.

About two-thirds of the participating employers had 1 to 99 employees, and more than one-quarter had 500 or more employees. The rest had between 100 and 499 employees.

About 61% of all participating employers, and 52% of the employers with fewer than 100 employees, said they already offer some kind of employee-funded or employer-funded retirement benefits.

Retirement Plan Demand

About 39% of the participating employers lacked retirement benefits.

The analysts found that 17% of all participating employers — 43% of the employers without retirement benefits — said they have no retirement plan but hope to add one within the next two years.

Another 6% of all participating employers — 15% of the employers without retirement benefits — said they have no retirement plans and aren’t likely to add retirement plans within the next two years, but that they are somewhat or very likely to consider new retirement plan options, such as joining a multiple employer plan, a pooled employer plan or group of plans.

Objections

The most common employer survey participant objections to offering retirement plans were:

  • 79% said their companies simply aren’t big enough
  • 31% said it was due to costs
  • 12% cited lack of employee interest
  • 12% cited lack of company interest
  • 6% cited administrative complexity and the amount of work involved

(Image: BGStock72/Shutterstock)

Allison Bell

Think_Allison

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