Business owners should rethink what they “know” about sponsoring retirement plans, says the founder of a firm that administers 401(k)s for small companies.
Along with assessing tax strategies and planning for future growth, many small business owners leave making decisions about employee benefits until the end of the year. Employment surveys indicate that after health insurance, the benefit most coveted by U.S. workers is an employee retirement plan. But Small Business Administration data show that nearly three-quarters of small employers do not sponsor retirement plans for their employees. Many entrepreneurs are clinging to outdated, negative notions about retirement plans, says Chad Parks, who founded The Online 401(k) in San Francisco in 1999.