By Andy Roe of SurePayroll
The majority of small business owners (66 percent) do not offer a 401(k) plan and 42 percent of those not offering it don’t see the value in it, according to the August 2016 SurePayroll Small Business Scorecard®.
Thirty-five percent of those not offering a plan said the fees are too expensive, and 23 percent said they don’t know how to manage a 401(k).
The small business owners that do offer a 401(k) said they do so to build retirement savings for themselves and their employees, with just 5 percent saying they offer it to attract new employees and 6 percent saying they offer it for tax breaks.
In total, 28 percent are offering a plan and another 6 percent plan to add one soon, the Scorecard survey found.
There needs to be more education for small business owners about the tax benefits and the long-term growth potential of investing in a 401(k) plan. The fees really are minimal when you consider the benefits to you and your employees. The plans available today make it very easy to manage, and your payroll provider can help guide you. It’s a growth opportunity for business owners.
The deadline for setting up a Safe Harbor 401(k), which offers small business owners a simplified way to manage a 401(k) plan, is October 1st.
Andy Roe is the general manager of SurePayroll, a Paychex Company. SurePayroll provides payroll services to small businesses nationwide and surveys those businesses on a monthly basis for insights into the small business economy. Follow Andy on Twitter @AndrewSRoe and connect with him on LinkedIn.
The views, opinions and positions expressed within this guest post are those of the authors alone and do not represent those of CBS Small Business Pulse or the CBS Corporation. The accuracy, completeness and validity of any statements made within this article are verified solely by the authors.