LIMRA research shows Americans’ top financial concern is affording a comfortable retirement and access to a workplace savings plan is the most effective way to get people to start to save for retirement. However when it comes to small businesses (2-99 employees) only 42 percent offer retirement benefits – either along with insurance benefits or alone.
The good news is LIMRA research finds 40 percent of small business employers (2-99 employees) feel retirement benefits are more important now than three years ago with 57 percent say it is equally as important. LIMRA research also shows there is a trend in the number of employees within the small business and the importance of retirement benefits. While only 37 percent of companies with less than 10 employees say they are more important now than three years ago, that number goes up to 64 percent for companies with 50-99 employees. The larger the small business, the more likely they were to say retirement benefits are more important today than three years ago.
Separate LIMRA SRI research points out that retirement plan access is the top reason American workers start saving for retirement. Nearly 4 in 10 of all workers said they began to save for retirement because their employer offered a retirement savings plan. While 36 percent of small businesses don’t currently offer retirement benefits to their employees, 4 percent plan to in the next two years, and 19 percent of them report they might.
Another way small business employees might be able to utilize workplace retirement savings plans is through multiple-employer plans (MEPs) — retirement plans that are sponsored by multiple employers. Federal proposals in 2018 are intended to broaden the number of small employers who can participate in MEPs (by making them available to groups on unrelated employers), thereby expanding the number of employees who can access retirement savings plans at their workplace. This should help increase the number of employees who can access retirement savings plans through their employment.