Progress but no cigar - small business retirement plans:

posted by Brian Mudd - 

Progress but no cigar - small business retirement plans:

Bottom Line: There's improved news for employee access to retirement plans in this year's update on retirement accounts from the Pew Charitable Trusts. The findings:

Percentage of companies offering retirement accounts by employee count at the end of 2016:

500+: 74%

50-99: 52%

>10: 22%

That gives you a look at the three most significant lines of demarcation with regard to retirement plans being offered. It's understandable that the smaller the company the less likely they are to offer a retirement plan but that's a headwind from an employee retention standpoint. The most commonly offered retirement plan is a 401k plan. For employees who participate in an employer sponsored plan - their turnover rate drops (commonly by 20%+). Given that employee turnover represents a huge cost for employers (the average cost is 20% of the gross compensation of that position) - it's generally a good value proposition for employees to offer these plans and often is critical for attracting and retaining key talent.

Brian Mudd

Brian Mudd

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