Why do some small businesses offer retirement plans?

Abstract

The brief's key findings are: (1) Many workers lack access to an employer retirement plan, and this coverage gap is driven by small firms. (2) But, in fact, about half of small firms do offer a plan, so it's important to understand the types of these firms with and without a plan. (3) Available data suggest that the small firms with a plan are larger and have workers with higher earnings and education. (4) Small firms without a plan cite three obstacles: not big enough or firmly established, workers prefer cash wages, and cost. (5) The first two obstacles may be insurmountable. But cost concerns might be eased by providing more information on low-cost options.