Already significantly behind large companies in offering retirement plans, small firms are becoming less likely to add the benefit, according to a new study.
The 2003 Small Employer Retirement Survey found that among small firms without retirement plans, only 7 percent say they’re very likely to offer them in the next two years. That’s down from 17 percent in 1998.
Overall, 58 percent of full-time employees at medium and large companies participate in retirement plans, while nearly 29 percent of employees at firms with less than 100 employees enjoy the benefit.
The survey, which was sponsored by the Employee Benefit Research Institute and other organizations, found that among the top reasons given for not offering a retirement plan were uncertain revenue (27 percent) and the costs to set up and administer a plan (16 percent).
To offer a retirement plan, the firm owners said, they needed to see an increase in profits (34 percent), a plan not requiring employer contributions (30 percent) or increased tax credits for starting a plan (23 percent).
Still, more than two-thirds of the companies said they were not aware of tax incentives for retirement plan sponsors that were included in the tax cuts signed into law by President Bush in 2001.
Vacation plans an upbeat signal?
Call it an oddball economic indicator, but with more small-business owners planning summer getaways, can an economic recovery be far behind?
A recent American Express survey found that 66 percent of small-business owners are planning summer vacations of at least a week, a 15 percent increase from last year.
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Still, the vacation trend is not as apparent locally. The South leads in the vacation arena, with 74 percent of business owners there planning trips, followed by the West (67 percent), Northeast (66 percent) and North Central (53 percent).
In total, 31 percent said they try to link the trips with business to save time and money.
The owners of larger businesses are more likely to get away than their counterparts at smaller firms. At firms with less than $200,000 in annual revenues, 56 percent of the owners are planning vacations, while 74 percent of those at larger firms have travel plans.
SBA Web site adds rule alerts
The Small Business Administration’s Office of Advocacy has set up a new page on its Web site to keep businesses informed about potential regulations that could affect their firms.
“This page highlights notices of proposed rulemaking that may significantly affect small entities and contains links to allow users to comment directly on proposals,” the Office of Advocacy said.
To see the page, visit www.sba.gov/advo/laws/law(underscore)regalerts.html.