The conventional wisdom is that most small businesses, and even some larger ones, don’t really care about their retirement plans because, unlike health care, they don’t have to write a check. Getting them to care by scaring them about their fiduciary responsibility will only go so far. Forbes guest columnist Steve Parrish of The Principal explains why small businesses should care and outlines how to maximize the retirement benefits they offer.
More people are relying on their employer sponsored retirement plans to fund retirement than in the past, when people paid down their mortgages and saved on their own. And with all the media attention and uncertainty about the future role of government and DB plans, younger people are more aware of the need to save for retirement.
Parrish recommends that business owners leverage the power of retirement plans to instill loyalty and make workers more productive by making simple changes to their plans, including:
• Make the plan about the employees – make it appealing.
• Offer employees options – give them a sense of control.
• Promote retirement as the “hidden paycheck”
Parrish highlights the costs of a poor retirement plan, where workers have to delay their retirement— including higher health care costs, higher wages for older employees and the risk of losing talented young workers because they’re stuck behind more senior people.
