Amid the growing concerns about the current economy, small business owners continue to recognize having a solid retirement plan as an important issue both personally and to their employees. This is according to survey results released last week by SunTrust Banks, Inc. Yet, despite this acknowledgement, almost 40 percent of small businesses do not offer retirement plan options to employees - citing affordability (90 percent), ease of use once the program is implemented (89 percent), ease of setting up a program (87 percent), fee transparency (87 percent) and quality and range of investment alternatives available (87 percent) as the main barriers.
The online survey, conducted independently for SunTrust in February 2009, asked 1,000 small business owners throughout the United States to identify the biggest challenges they face regarding retirement plans - both for employees and for themselves, personally.
According to the survey, 85 percent of business owners believe that a retirement plan is an important benefit to their employees, second only to healthcare coverage. A majority of small business owners (61 percent) agree that it is an employer's responsibility to offer retirement benefits and 75 percent say it positively affects attracting and retaining high-quality employees. However, despite their beliefs about the importance of having and offering a retirement plan, only six out of 10 of those owners currently offer a retirement plan to their employees.
Other key findings of the study were:
- The current economy is posing new challenges to the personal and company retirement planning of small businesses: 81 percent of owners agree that the current economic climate has changed the way they think about their own retirement with 41 percent of them citing that it has made planning for retirement MORE important. Additionally, 67 percent say that the current economic climate has changed the way they think about their company-sponsored retirement plans.
- Almost nine in 10 owners of small businesses have a personal retirement plan, with 401(k) being the most popular of the plans.
- Small business owners recognize the importance and desirability of 401(k) retirement plans in particular, as they overwhelmingly believe that having a 401(k) allows employees to better manage their retirement plans (86 percent). Small business owners who have a personal 401(k) plan are significantly more likely to be satisfied than those who do not (86 percent vs. 68 percent).
- Eight in ten say having a 401(k) plan to participate in for their own retirement savings would give them greater peace of mind.
"The survey reinforced to us that in this economy, retirement plans are essential to the health of businesses, families and communities", said Brenda Seliga, senior vice president and head of Employee Benefit Solutions at SunTrust.
"While we certainly understand the apprehension that exists as part of the current economic climate, we find it unfortunate that so many small businesses feel unable to offer retirement plans that can help their employees build solid futures. SunTrust recognizes that small business owners want to be empowered to support their employees by offering smart, competitive retirement solutions. This is why we have launched our new Online 401k, to help make it simple and affordable for small employers to help both themselves and their employees establish a solid foundation for their future."
For full survey findings or for information on the SunTrust Online 401k, please visit SunTrust's Business Solutions Central.