Nationwide: Workers Unprepared for Retirement Reaches Crisis Level

“Our survey found that nearly half (46 percent) of small business owners were not aware or were unsure that an employee self-funded retirement plan could be offered without having to match employee contributions,” says Anne Arvia, senior vice president of retirement plans for Nationwide Financial. “The provisions in the Small Businesses Add Value for Employees (SAVE) Act before Congress will remove many of the barriers that have kept small businesses from offering their employees a retirement plan.”

The SAVE Act encourages small businesses to pool together to offer Multiple Small Employer Plans (MSEP) that are less expensive than single employer plans and simplify an employer’s administrative requirements. H.B. 4742, sponsored by Ron Kind (D-WI) and David Reichert (R-WA), allows small employers to reduce costs by pooling their resources under a single plan with easier administrative requirements.

According to the survey, 71 percent of owners say that when selecting an employee self funded retirement savings plan it’s important that the plan has flexibility to match or not match employee contributions. And 62% say it’s important that multiple employers can group together to pool resources and reduce administration costs.

Four in five owners say when selecting a plan it’s important the plan has minimal administration requirements and can be offered at a low price. Three in four owners say it’s important that the plan can be converted to better meet their needs as their business grows.