20th annual Dun & Bradstreet Small Business Survey Finds Few Provide Retirement Plans

The 20th annual Dun & Bradstreet Small Business Survey found that only 17% of small businesses offer their employees retirement benefits. In this area, women-owned and home-based businesses continue to lag behind their counterparts. Among those companies providing retirement benefits, 401k and IRA/Keogh accounts are the most popular. A summary of the finding follow.

Provide Retirement Benefits

Most (83%) small business respondent companies did not provide retirement benefits to their employees.

Not surprising, those companies more likely to provide retirement benefits included Larger companies (6-25 employees), with Sales Volumes of $10K or more, in the Business Services, Manufacturing, or Services sectors, and who classify their companies as Leader.

Those companies more likely not to offer retirement benefits included: Women-owned Businesses, Smaller Businesses (1-5 employees) Home-based Businesses, Businesses that are Consumer oriented, Businesses with Smaller Sales Volumes (less than $50K), those in Wholesale, Retail, Real Estate, or Transportation sectors and those who characterize themselves as a Survivor or Steady.

Compared to 2000, fewer businesses in 2001 acknowledged providing retirement benefits to their employees.

Provide Retirement Benefits to Full-Time Employees

Three-quarters of small businesses that provide their employees with retirement benefits appear to offer them to most of their employees. Nearly two-thirds (64%) offered such benefits to between 91%-100% of their employees, 13% offered retirement benefits to between 61%-90% of their employees, and 15% offered them to 60% or less employees.

In the 2000 survey, retirement benefits were provided to a greater percentage of full-time employees than in 2001. While 80% of small businesses provided 100% of their employees with retirement benefits in 2000, under two-thirds (64%) provided 91% to 100% of their employees with the same in 2001.

Types of Retirement Benefits Offered

The most popular retirement benefits offered by Small Business were the IRA, Keogh and the 401k plans. Just over one-third (35%) offered IRA or Keogh programs, and another third (32%) offered a 401k Plan. Seventeen percent offered a Qualified Pension Plan, 9% offer Personal Investment Portfolio, 3% offered Health Insurance for Retired Employees, and 2% offered Whole Life Insurance.

Compared to 2000, more companies in 2001 offered 401k plans, but fewer offer qualified pension plans and personal investment portfolios.

--- Rick Meigs, Publisher, 401khelpcenter.com, LLC