|Chris Crum has been a featured writer with the WebProNews.com team and the iEntry Network of B2B Publications since 2003. Chris writes for Small Business Resources about social media, search, and what’s new for small business. Hundreds of publications link to Chris’ articles including the Wall Street Journal, USA Today, LA Times and the New York Times.|
The Transamerica Center for Retirement Studies has put out a study finding that small business retirement plans are inferior to those at larger firms.
The TCRS is a nonprofit, private foundation funded by contributions from Transamerica Life Insurance Company and its affiliates. The actual study was authored by Catherine Collinson, President of the Transamerica Center for Retirement Studies. She has been in the retirement services industry for fifteen years.
The study was conducted between April 23rd and August 15th, using sixteen-minute telephone interviews among a sample of 750 employers deemed to be nationally represented and a twenty-two minute online survey between January 21st and February 21st among 3,651 workers using the Harris online panel. This sample is also considered to be nationally represented. Also included was a ten-minute online survey, conducted between March 5th and March 19th, among a sample of 610 unemployed or underemployed people using the Harris Interactive online panel.
“The vast majority of workers (88 percent) at small companies value retirement benefits as important, yet small companies are less likely than large companies to offer a 401(k) or similar plan (e.g., SEP, SIMPLE). Additionally, small companies that do offer plans tend to have plans with fewer features,” says Collinson.
“Policymakers, experts, and the retirement industry are seeking to increase plan coverage among workers, and specifically those of small companies,” she writes. “Much of this discussion has centered around encouraging more employers to offer a plan.”
Only 58% of small company workers report having access to a 401(k) or similar plan. Of the 28% of small companies that don’t offer a plan, only 22% of them said they are likely to offer one in the next two years. Frequently cited reasons include cost, company size (not large enough) and difficult business conditions.
According to the study, 55% of small company workers are confident they’ll be able to fully retire with a comfortable lifestyle. 11% are “very confident,” and 44% are “somewhat confident”.
59% of them plan to work past the age of 65, or don’t even plan to retire at all. The study notes, however, that this sentiment is shared among workers of all company sizes. The number is just bigger for smaller companies: 61% vs. 56%.
The majority of small company workers, the study indicates, plan to continue working after they’ve retired. 45% plan to work part-time, and 10% plan to work full time.
While this is only one study on the subject, it highlights a major lack of options for small business employees, which could ultimately push them toward larger companies with better benefits. While small businesses certainly have valid reasons for reluctance to adopt policies, these stats are worth paying attention to because many small business employees are more concerned about their economic futures now than any other time in recent memory.
Small businesses are defined as firms with fewer than 500 employees for the purpose of the study. You can find the study in its entirety here (pdf).