|
Study: Retirement plans lag
|
 |
April 4, 2000: 1:13 p.m. ET
Small employers still less likely to offer retirement benefits; information is key
|
NEW YORK (CNNfn) - Small employers continue to lag bigger companies in offering retirement benefits to workers, partly because they don't understand the choices that are available, a research group reported Tuesday.
Fewer than half of workers in small businesses participate in company retirement plans, compared with 80 percent participation among larger businesses, according to the Employee Benefit Research Institute.
 "The gap is sizeable," said Paul Yakoboski, the EBRI researcher who headed the institute's third annual Small Employer Retirement Survey, results of which were to be released officially at a lunchtime panel discussion of retirement issues Tuesday in Washington, D.C.
Administrative costs were part of the reason, but the survey found non-sponsors tended to have smaller revenue, to be newer companies and to employ younger workers or seasonal help than companies that do offer plans.
Nonsponsors also had more staff turnover, and they reported that the workers had other priorities, such as higher pay or health benefits, rather than retirement programs.
'Lack of information' hampers planning
Even so, the survey found "a lack of information among small employers, a basic unfamiliarity of the vehicles that the government has created specifically for them," Yakoboski said.
One-third (33 percent) of nonsponsors say they have never heard of the "Savings Incentive Match Plan for Employees" (the so-called "Simple" plan, created by the Small Business Job Protection Act of 1996), and 54 percent of nonsponsors report that they have never heard of simplified employee pensions (SEPs). By comparison, very few nonsponsors say they are unaware of 401(k) plans.
(You can test your knowledge by taking the EBRI's quiz and comparing your results to employers in the survey.)
Yakoboski said, however, that a retirement plan can be an important incentive in today's tight job market: "It has a direct impact on the ability to attract and retain employees," and it influences their attitudes and productivity as well.
Workers, however, are showing a sharper awareness of retirement planning issues, he said. And financial advisers, such as accountants and stock brokers, are starting to see the benefits of helping small employers implement such plans.
"I think what you're going to see is a greater effort on the part of the private sector," he said. "When the workers turn to the employers and say, 'this is something we are interested in,' that will turn the employers around." 
|
|
|
|
|
 |
|
