The importance of employer perceptions of benefits and costs
At any given time, only about half of U.S. private sector workers are covered by an employer-sponsored retirement plan, and few workers save without one. The coverage gap, which undermines the retirement income security of the nation’s workers, is driven by a lack of coverage among small employers. But, in fact, about half of firms with fewer than 100 employees do offer a plan for their employees.
2023 Small Employer Retirement Survey summary
This study presents results from our 2023 Small Employer Retirement Survey, which provides an up-to date and comprehensive understanding of why some small firms offer retirement plans and the barriers preventing other small firms from offering one. A unique aspect of this survey is the inclusion of 100 firms with 0 to 4 employees, a group typically ignored in most small business retirement surveys.
Key Survey insights:
- Firms’ perceptions of the value of retirement plans for hiring and retaining workers and of the costs involved are important determinants of whether they offer, or will likely offer, a plan.
- As in previous surveys, firms report that the two main barriers to offering a plan are: – Revenue stability/size of the firm – Perceived costs or administrative burden of having a plan
- However, concerns about costs or administrative burdens are driven by misperceptions; many firms are unaware of lower-cost options and tax credits.
- Finally, the recent growth of state-sponsored retirement programs may encourage firms without a plan to offer one.