Retirement a Growing Priority for Small Business Owners
401(k) Plans, Matching Programs and Confidence Up Sharply Compared to 2008,
According to National Survey by ShareBuilder 401k
SEATTLE, July 23, 2013
SEATTLE, July 23, 2013 /PRNewswire/ --After weathering a recession that
forced many to curb, cut and sometimes even tap into employee retirement
savings plans, small business owners are offering and investing in 401(k)
plans at rates considerably higher than five years ago.
In fact, according to a nationwide survey of small business owners by
ShareBuilder 401k, nearly a quarter (24 percent) of small businesses now offer
a 401(k) plan (compared to 10 percent in 2008), with the majority of small
business owners (58 percent) saying their current retirement savings is higher
than it was five years ago.
"Though the Great Recession had a negative impact on many Americans'
retirement plans, it appears it was also a wake-up call when it comes to
planning for the long-term," said ShareBuilder 401k President Stuart
Robertson. "A record percentage of small businesses are reporting ownership of
a retirement plan—a sign that more small business owners are prioritizing
their own and their employees' need to save for the future."
The survey conducted during June 2013 revealed a significant shift in
sentiment and behaviors related to 401(k) planning and investing when compared
to a similar survey conducted in 2008, including: a sharp increase in small
business owners offering a 401(k) plan – up from 10 percent in 2008 to 24
percent in 2013; 65 percent now feel confident they're saving enough for
retirement, compared to 44 percent five years ago; 82 percent of all small
business owners view 401(k)s as an effective approach to saving for
retirement; of the 28 percent of businesses with a 401(k) plan that either
stopped offering a match or lowered their match over the past five years, 56
percent have since reinstated it; and 58 percent of small business owners
describe their current retirement savings as higher than it was five years
The survey also revealed a shift in how small business owners view their
obligation and need to offer retirement plans to employees, with 89 percent of
small business owners with more than one employee that offer a 401(k) plan
reporting it is an important factor for attracting and retaining the best
talent. Additionally, 50 percent of those who offer a 401(k) plan believe
offering a plan is their responsibility as a business owner.
"Small business is a key driver of our economy and job creation, and therefore
it is crucial small business owners prioritize retirement planning for their
employees – so more Americans can plan for a better future," said Robertson.
"We still have a long way to go, but we are pleased to see a significantly
higher number of businesses offering plans and that many others with plans are
reinstating matching contributions."
The survey also found the two biggest reasons more small businesses are not
offering a plan to be "not enough employees to make it worthwhile" (reported
by 48 percent of respondents) and "can't afford to offer a company match" (at
"As more small businesses gain awareness that matching isn't a requirement and
that any size business can have an affordable plan – even the self-employed –
we expect the uptrend in offering a 401(k) to continue," said Robertson.
The comparative data used in the report comes from a similar survey of small
business owners commissioned by ShareBuilder 401k called the 2008 Small
Business Annual Retirement Trends report. Both this year's survey and the 2008
research surveyed 500 small businesses from across the United States with 50
or fewer employees.
Since 2005, ShareBuilder 401k has made all of its pricing readily available on
its website, and the company began advocating for an industry benchmark of
less than one percent for "all-in" employee-paid fees in 2007. ShareBuilder
401k is not a fund provider and takes an unbiased approach in the evaluation
and selection of funds with a focus on low-expense, index based investments
from the leading ETF providers such as Vanguard, iShares, SPDR and PowerShares
to create a powerful line-up from which participants can choose, including
five model portfolios. ShareBuilder 401k also serves as the investment
manager role (ERISA 3(38) fiduciary) for employers, which helps maximize
employer protections and saves employers the time of regularly reviewing
investment options that are made available to employees.
About ShareBuilder 401k by Capital One
ShareBuilder 401k, a subsidiary of Capital One Financial Corporation, provides
easy-to-use, cost-efficient 401(k) retirement plans for small and mid-size
businesses serving clients that include the self-employed to those with over
2,000 employees. ShareBuilder 401k is a leader in providing 100 percent
index-based ETF investments (plus a money market) in 401(k) plans.
ShareBuilder 401k offers a suite of on-demand services that make it simple for
employers and employees to open and manage their retirement plans online at
www.sharebuilder401k.com. ShareBuilder 401k plans provide market-efficient
investments and model portfolios that make it easy for employees to select
smart investments to help them get on track to meet their retirement goals.
Customers can also take advantage of ShareBuilder 401k consultants, customer
success managers, and customer care agents to receive assistance in choosing
and managing their retirement benefits.
Advisory services are provided by ShareBuilder Advisors, LLC, an SEC
registered investment advisor. ShareBuilder Advisors, LLC, is a subsidiary of
Capital One Financial Corporation.
401(k) plans are: Not FDIC insured – Not Bank guaranteed – May lose value
SOURCE ShareBuilder 401k
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