Small Businesses See Few K Plan Options

December 26, 2001 ( - While almost 70% of small business owners sponsor a 401(k) plan, less than half considered more than one retirement-plan alternative, a new survey finds.

According to Nationwide Financial’s research, profit sharing plans, money purchase and defined benefit plans are rarely presented as options to small business owners.


The survey also found that business owners’ top concerns about offering a retirement plan are:

  • cost, cited by 89%
  • fiduciary or legal concerns, noted by 83%
  • the complexity of offering a plan, 81%
  • the time to administer a plan, cited by the same percentage.

For business owners with fiduciary concerns, top concerns included:

  • business or personal liability, cited by 89%
  • providing enough plan information, mentioned by 88%
  • investment selection and monitoring, noted by 86%.

Defining the Benefits

Small business owners also listed the following reasons for offering a retirement plan:

  • concern for employee welfare, listed by 96%
  • positive effect on employee attitude and morale, mentioned by 93%
  • competitive advantage in recruitment and retention of employees, cited by nine out of 10
  • tax-deferred savings for employees, listed by the same percentage.

The study also found that business owners who do not offer a plan often do not do so because they believe their employees prefer higher wages and other benefits.

The Nationwide Financial Small Business Retirement Study surveyed 730 business owners and decisionmakers from businesses with 25 to 200 employees.