Public policy might be necessary to get more American workers access to retirement plans, according to a recent study of small- and mid-sized businesses.
Most smaller employers want to offer workplace retirement plans, but wait until they establish scale and stability before doing so, but some don’t establish plans no matter how large they grow or how long they’re in business, according to a report from Pew Charitable Trusts that focused on businesses with 5 to 250 workers.
According to “Employer Barriers to and Motivations for Offering Retirement Benefits,” a Pew issue brief released in June, workers at these small- and mid-sized businesses are the least likely to have retirement savings options, which has led many states to consider sponsoring 401(k)-like retirement plans themselves, or incentives to encourage employers to start plans of their own. Just over half of the business owners and managers surveyed by Pew reported offering a retirement plan.
For small- and mid-sized businesses, the most common barriers to establishing a retirement plan benefit are financial cost, cited by 37 percent of the respondents, and a lack of organizational resources, cited by 22 percent of the respondents.