Small-business owners need to know retirement plan
small-business owners are on track by recognizing that retirement
plans have a positive effect on employee attitude and performance,
as well as give companies a competitive advantage in employee recruitment
and retention. But when it comes to finding a plan that fits their
needs, a recent study indicates that small-business owners need
to do their homework.
Less than half of small-business owners considered
more than one type of retirement plan when they chose plans for
their operations. More than two-thirds of employers (69 percent)
chose 401(k) plans. The remaining 31 percent chose from SIMPLE,
profit sharing, 403(b), ESOP and other plans, according to the Nationwide
Financial Small Business Retirement Study.
"The truth is that 401(k) plans are wonderful
for businesses and are often the best choice," said Steve Rose,
a vice president for Nationwide Financial. "However, many times
a 401(k) plan can be structured with other plans, or some other
type of plan can be used to offer tailored solutions for a given
business owner. Any investment professional you work with should
offer you more than one scenario for your plan and help you weigh
the benefits of each."
What worries the boss
The survey also found, not surprisingly, that cost is the
top concern of 89 percent of small-business owners looking into
establishing company retirement programs.
Other retirement plan issues that worry owners are
fiduciary or legal concerns (83 percent), the complexity of offering
a plan (81 percent) and the time it takes to administer it (81 percent).
Do you offer a retirement plan to your employees?
If so, did you investigate the various plans that are offered before
choosing which plan best fit your workers' -- and company -- needs?
If not, do you plan to offer retirement benefits to your employees,
and will you consider more than one option?
-- Posted: Jan. 16, 2002