Nevin's Data "Points"

  A new report suggests that small business owners broadly support state-run IRA programs — with the strongest backing among newer firms. Or at least they did. The just-published  survey  comes from Pew Charitable Trusts, which has previously (and consistently) chronicled support for these programs among small businesses.  This latest was conducted among employers in three states where that type of legislation has been introduced:  Massachusetts , Pennsylvania, and  Washington .  According to Pew, support is strong across the board: 84% of respondents in Massachusetts, 76% in Pennsylvania, and 73% in Washington favor establishing an automated savings program (ASP). The report also highlights bipartisan backing, with majorities of Republican, Democratic, and independent business owners expressing support.  It further finds “statistically significant” support among newer firms, those with moderate revenues, service-sector businesses, and — perhaps n...

   The solution to the coverage gap lies through small business—but only about a third have been approached in the past year about offering one, according to a new survey. That’s not exactly a new revelation—any number of surveys and government data throughout the years indicates that the vast majority of large(r) employers already offer a workplace retirement plan. [i]  The coverage “gap” so often held out as a sign of “failure” by the critics of the 401(k) lies almost exclusively among smaller employers. Which means that closing it will require a focus on small business—and understanding the “resistance.”   At the outset, it’s worth acknowledging a certain truism about small plans (the kind small businesses set up)—they are sold, not bought. Consequently, it was disappointing to see that datapoint about just 31% of the businesses that do not currently offer a plan having been approached in the last 12 months about offering one. [ii]   That survey finding ...

There’s no one silver bullet likely to close the nation’s retirement plan coverage gap—but the target is pretty easy to spot. As it turns out, the nation’s retirement plan access coverage gap is almost exclusively found among small businesses, and it’s not hard to imagine why. The failure rate for small businesses is daunting—and those who’ve managed to avoid that fate are doubtless focused on trying to avoid becoming a statistic. Under those circumstances one can well appreciate that offering benefits, much less RETIREMENT benefits, probably seems like a luxury for another time, if not another business. A recent issue brief by Anqi Chen and Alicia Munnell of the Center for Retirement Research (CRR) at Boston College examined the issue, and drawing on previous research [i] cited the following three main barriers: uncertain revenues that make it hard for a firm to commit to a plan; employee preferences for wages and other benefits; [ii] and the cost associated with esta...

People who don’t have access to a plan at work don’t save for retirement. Here’s why small business owners should care. About half of private sector workers did not participate in a workplace retirement savings program in 2012, and a recent report by the Government Accountability Office (GAO) found that most workers who did not have coverage lacked access to such programs. While there are many reasons that might account for those individual decisions, among those not participating, the majority worked for an employer that did not offer a program or they were not eligible for the programs that were offered. In particular, lower income workers and those employed by smaller firms were much less likely to have access to programs, after controlling for other factors. However, the majority of these workers participated when they had workplace access. Here’s why small businesses should provide that access. To attract and retain workers. Okay, every time somebody talks about the rea...