A survey conducted by Harris Poll on behalf of Nationwide, an insurance and financial services organization, found that because of the enactment of the Affordable Care Act (ACA), small business owners are increasingly reconsidering retirement plans in order to retain and recruit employees.
The Small Business Owner Study, organized in June 2016, surveyed 502 U.S. small business owners of companies with under 300 employees. The poll revealed that 29% of these owners will raise contributions to 401(k) plans because the ACA has made health benefits less attractive to employees—an attitude that was implemented after the ACA’s establishment—and 43% will do so based on the importance of appealing to and maintaining employees as a result of the Act.
“The changing health care marketplace has created an opportunity for business owners to increase investment in retirement benefits offered to employees,” says John Carter, president of Nationwide’s retirement plans business. “Business owners who help their employees prepare for retirement can differentiate their business as a destination for top talent and a place where valuable workers want to stay.”
Additionally, Carter says that American workers need great assistance in planning for retirement. The survey found that 86% of small business owners believe employees currently face a retirement readiness crisis. A noteworthy number, since according to the U.S. Small Business Administration, small businesses with 500 or less employees amount to 99.7% of all employers, employ almost 50% of private-sector workers (48.5%) and develop 63% of new private-sector jobs in the U.S.
The survey reported that 19% of business owners who do not currently offer a 401(k) plan will prepare to in the future, with 23% of that number doing so as an effort to appeal and keep employees in light of the ACA.—Amanda Umpierrez