The majority of small business owners (66%) do not offer a 401(k) plan and 42% of those not offering it don't see the value in it, according to the August 2016 SurePayroll Small Business Scorecard®.Thirty-five percent of those not offering a plan said the fees are too expensive, and 23% said they don't know how to manage a 401(k).
The small business owners that do offer a 401(k) said they do so to build retirement savings for themselves and their employees, with just 5% saying they offer it to attract new employees and 6% saying they offer it for tax breaks. In total, 28% are offering a plan and another 6% plan to add one soon, the Scorecard survey found.
"There needs to be more education for small business owners about the tax benefits and the long-term growth potential of investing in a 401(k) plan," said SurePayroll General Manager Andy Roe. "The fees really are minimal when you consider the benefits to you and your employees. The plans available today make it very easy to manage, and your payroll provider can help guide you. It's a growth opportunity for business owners."
The deadline for setting up a Safe Harbor 401(k), which offers small business owners a simplified way to manage a 401(k) plan, is October 1st .
