Profile
And, according to Dun and Bradstreet’s 20th Annual Small Business Survey, those that did offer retirement plans where likely to:
- be “larger” small businesses, employing more than 5 workers,
- have annual sales volumes of $10, 000 or more,
- be in the business services, manufacturing, or services sectors, and
- classify their companies as “Leaders”
In addition, of those that offered retirement benefits:
- nearly two-thirds offer them to between 91% and 100% of their employees,
- some 13% offer retirement benefits to between 61% and 90% of their workers,
- while 15% offer them to 60% or less of their staff complement
Plan design
When asked what type of retirement benefits they offered,
- just over a third offered IRAs or Keoghs,
- just under a third sponsored 401(k) plans,
- some 17% had qualified pension plans,
- almost one out of ten offered SEPs
- only 6% offered a personal investment portfolio, and
- just 3% provided health insurance to their retirees
Compared to the same survey conducted a year earlier, more companies in 2001 offered 401(k) plans, but fewer offered qualified pension plans and personal investment portfolios.
Keeping Healthy
The survey also revealed that 34% of small businesses provided health care benefits to their employees. Not surprisingly, the companies in this group were likely to:
- be larger “small” employers, with more than six workers,
- have annual sales volumes greater than $10,000
- be store or office based, as opposed to being run from home
- serve business and commercial accounts in the business services, manufacturing or construction sectors, and
- characterize themselves as leaders
In addition, companies that offered healthcare benefits tended to provide them to most of their employees, in fact, two-thirds reported that they granted healthcare benefits to more than 90% of their employees. Only 5% offered benefits to fewer than 20% of their staff complement.
Rising Costs
Almost three quarters of small businesses that provide health care benefits indicated that their premiums had increased since 2000. Only 2% cited a decrease in their premiums, while the remainder reported that their costs had remained constant.
Of those that reported an increase,
- almost 40% cited an increase smaller than 10%,
- while just over a third said it was between 10% and 20%, and
- over a quarter of the sample felt it was more than 20%
Companies whose health care premiums increased dealt with the increase in the following ways:
- just under a third indicated that their companies assumed the extra cost
- a similar number said that they had shopped for a new carrier,
- one in 10 respondents said that they have increased their employees’ premiums,
- some 3% now cover fewer employees,
- while 5% said that they did nothing
In the previous survey, respondents were more likely to indicate that the company assumed the extra cost of healthcare, 61% in 2000, compared with 30% a year later.
In 2000, respondents were more likely to consider shopping for a new carrier or reducing benefits to offset increasing health care premiums in 2001.
Methodology
The survey comprised telephone interviews with 540 owners, senior executives and key decision-makers of small businesses conducted between March and April 2001. For the purposes of the study, small businesses were defined as those with fewer than 26 employees.
– Camilla Klein editors@plansponsor.com
The complete survey can be viewed at www.dnb.com/smallbusiness/ .