Millennium Trust Blog

A Growing Retirement Crisis in America: How are small businesses being affected?

November 14, 2018
By Millennium Trust
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Small businesses are at the heart of the retirement crisis, but employers and employees are not in sync when it comes to retirement savings

Recently, we conducted our inaugural Millennium Trust Small Business Retirement Survey to gauge the savings attitudes and behaviors of small business employers and employees that do not have access to a retirement savings benefit. Despite the fact that many Americans are aware of the growing retirement crisis, millions of employees at small businesses do not have access to a retirement savings benefit. But why?

We asked decision makers at companies with 150 employees or fewer that do not offer a retirement savings benefit about their perceptions of these programs, their motivations for offering them, and how prepared they feel Americans are for retirement. We also asked employees how important retirement programs are to them and how they influence their motivations when choosing an employer.1

Overall, we found some areas of agreement, as well as some striking disconnects.

When it comes to retirement, employers and employees both agree on one thing: America is facing a growing retirement crisis. Our survey found that 93% of small business employers and 95% of employees do not think Americans will have enough money saved to maintain their lifestyle in retirement.

The importance of saving for retirement is viewed differently between employers and employees, however. While there is near unanimity among employees (88%) about the importance of having a workplace retirement savings program when choosing a new employer, just 67% of employers agree.

Employers Have a Limited Understanding of Options
Offering a traditional retirement savings option can be costly for small businesses, which may be part of the disconnect and explain why many of these employers don’t even consider them. As much as 64% of the small business employers we surveyed noted that their company is not large enough to offer a retirement savings solution, and 66% indicated that money is the most significant barrier to providing a program. While 23% of employers strongly agree that having a retirement savings option for their employees would help attract and retain talented workers, almost half (45%) have not spent time researching potential programs.

Employees Want to Save
Employees, on the other hand, are aware of the importance of saving for retirement and factor employer retirement programs into their decisions. As much as 83% of employees say that retirement programs are an essential consideration for staying with their current employer, and 87% are likely to participate in one if offered. Additionally, three-quarters of small business employees noted that access to retirement programs could help Americans proactively save for retirement.

Despite the knowledge gap, small businesses do have options when a 401(k) just isn’t the right fit for their business.

Millennium Trust is proud to offer innovative solutions than can help small businesses bridge this gap and make retirement saving a reality for their employees.

To learn more about how we can help your small business save for retirement, visit our Workplace Savings Solutions webpage.


1The Millennium Trust Small Business Retirement Survey was commissioned by Millennium Trust company, and conducted by CITE Research (www.citeresearch.com). The online survey was conducted among 500 decision makers at companies with less than 150 employees that do not offer any type of retirement savings option, and 500 employees who are working full-time at employers with no retirement savings option. The survey, one of the first of its kind to be conducted exclusively with employers that do not offer retirement benefits, was fielded between September 28 and October 8, 2018.

The material in this blog is presented for informational purposes only. Millennium Trust Company performs the duties of a directed custodian, and as such does not sell investments or provide investment, legal or tax advice.

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