Small business retirement plans fine in theory, difficult in practice

Although small-business owners think that an employer-sponsored retirement plan helps with hiring and retaining employees, nearly 40% don’t offer the benefit, according to a recent survey. A full 85% of the 1,000 small-business owners who participated in an online survey conducted by SunTrust Banks Inc. in February said that they thought that a retirement plan was an important benefit, and 61% said they think it was the employer’s responsibility to offer such a benefit. In addition, 75% said that offering a retirement plan had a positive impact on attracting and retaining high-quality employees, the Atlanta-based firm found. But just 60% said that they offered a plan, and the remainder responded that they didn’t, largely due to cost. A full 90% of those who said that they didn’t offer a plan cited affordability as the leading factor. In addition, 89% cited the lack of ease of use, 87% said the lack of ease of setting up a program, 87% said fee transparency, and 87% said the range of investment alternatives available were the main barriers to setting up a retirement plan. SunTrust Banks had total assets of $189.3 billion and total deposits of $105.4 billion as of Dec. 31.