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Small-Business Perspective of Big Ideas for Retirement

Workers highly value employment-based savings plans and opportunities. That consensus was shown by workers recently polled in a LIMRA Secure Retirement Institute study. About six in 10 workers have gone as far as supporting the idea that states and federal governments should mandate that employers offer retirement plans.

In May 2016, Connecticut passed legislation to establish a statewide retirement system. It would require all businesses with five or more employees to offer a retirement plan, either privately or through a state-run program.

To gain further insight into the impact of this plan, the LIMRA Secure Retirement Institute commissioned a series of four focus groups in Hartford and Stamford, Conn. Small-business owners who do not currently offer retirement plans participated in the focus groups.

Although it was a small sample, responses from these business owners can offer some insight into how small-business owners across the nation may react to the mandates of the new legislation. Here is what they had to say.

1. Most small-business employees without a workplace retirement plan do not save for retirement. Employers believe many employees cannot afford to save, rely on a spouse or a partner for retirement, or do not prioritize saving.

2. Small-business owners find it inconvenient and costly to offer a plan, especially with low employee demand. Employers prefer to focus on their business rather than on administering and paying for a plan they believe will not be used or appreciated. However, some employers believe offering a retirement plan would help attract and retain workers.

3. Views on a state-run retirement plan are mixed. Those with a positive view of the plan like the idea that the state is addressing the retirement crisis and providing employers with a new benefit. One issue fueling a negative predisposition is the unsatisfactory experiences some have had with the health insurance exchanges.

4. After learning more about some of the plan’s basic features, most employers are mildly positive about it. Favorable features include having an investment lineup that will use private market options and the fact that employers don’t need to contribute.

5. Business owners would equally prefer the Connecticut state plan or a private option, but fewer would choose the Multiple Employer Plan (MEP). Although some business owners like the idea of sharing cost and responsibility, most were not comfortable with MEPs. However, those who are already part of a private association were more likely to view MEPs favorably.

6. Business owners also were asked to review potential employer-oriented communications about the plan to see which messages were most compelling. The most appealing messages were those that emphasized the program provided an opportunity for their employees to have a retirement plan. One of the least appealing messages was that the plan offered payroll deduction.

Few would say that giving more employees access to a retirement plan is a bad thing. The real debate is in determining the best way to accomplish that. In general, people express less confidence in government versus other entities when it comes to administering a retirement plan. One- third of people said they are not confident in their state or the federal government when it comes to administering retirement savings, according to recent LIMRA Secure Retirement Institute research.

Like many small-business owners, Connecticut’s employers are largely unaware or not very knowledgeable about the state program. For those who are aware, their perceptions are mostly a function of their personal attitudes and experiences. States and  employers alike have a vested interest in helping workers save for retirement. Educating them so they can make the best decision for their business and employees will be critical to the success of the plan they implement.


Alison Salka, Ph.D., is senior vice president and managing director of research, LIMRA Secure Retirement Institute. Alison may be contacted at

Alison Salka is responsible for directing LIMRA’s retirement research program. She supervises and conducts consumer research, benchmark studies and white papers focused on helping member companies better understand issues and trends in the retirement market. Contact her at

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