The vast majority of small business owners (82%) support the concept behind a proposed new retirement plan that would provide their employees with a guaranteed monthly pension benefit for life after they stop working. And 69% say they would be interested in adopting such a retirement plan for their own businesses.
These and other findings in a survey of 500 small business owners were released last week by the National Conference on Public Employee Retirement Systems, which formally launched its Secure Choice Pension proposal in September. The SCP plan, modeled on the public pension system, would allow private-sector employers to provide workers who are not in a pension plan with a guaranteed, lifetime retirement income that would be immune to stock market fluctuations and economic downturns. The national telephone survey was conducted in mid-September.
"While Wall Street focuses narrowly on next quarter's profit statements, the small business owners take a much longer view — and they know that the long-term health of their businesses depends heavily on loyal, productive employees," says Hank Kim, executive director and counsel. "Our survey shows clearly that small businesses, which truly are the engine of American economic growth, want to offer retirement benefits to their employees — not just because they feel a moral obligation to do so, but because they believe it's good for business and their bottom lines."
The survey also found that owners are acutely aware of the need for better options for retirement savings. More than half (56%) worry about their own retirement security and nearly two-thirds (65%) worry that their employees will not have enough money to retire. Almost three-quarters of small business owners (73%) feel a responsibility to provide some kind of retirement benefit.
"Surveys show that after watching the Great Recession wipe out significant value from their 401(k) balances, most private-sector employees want the security of lifetime pension benefits," Kim says. Political affiliation had no significant impact on support for the SCP. Support among Democrats, who made up 31% of the respondents, was 82%. Support among Independents, who made up 36% of the respondents, was 84%. Support among Republicans, who made up 33% of the respondents, was 80%.
"To effectively address America's retirement security crisis, workers need all three legs of the retirement security stool — pension benefits, Social Security and personal savings like 401(k)s," Kim says. "Our SCP proposal is a viable response to workers' desires, employers' business needs and America's overall retirement crisis."
The SCP would be a public-private enterprise, where each state would establish its own SCP, which private-sector employers would join. Both the participating employers and employees could make regular contributions to the SCP.
"The SCP would address the private sector retirement security crisis through a guaranteed, affordable, sustainable pension," Kim said. "With the SCP, retirement security need not continue to be an elusive goal, even for those who already have, or who already provide, retirement benefits."
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