Because of the Great Recession, fewer small employers are likely to offer benefits to their employees. According to a LIMRA study of 754 firms with fewer than 100 employees, only 47% indicated that they offered benefits — the lowest level in the past 20 years. With 98% of businesses considered “small” (representing 35% of the workforce, according to the U.S. Census bureau) and a sector that many economists regard as the engine of growth, this decline is significant.
The recession caused many small businesses to close, and new ones have been less likely to offer benefits. According to the study, medical and prescription benefits are most likely to be offered by smaller companies. With increased regulation and other government requirements and continued high unemployment rates, it’s hard to envision why more companies would be likely to offer retirement benefits. And inexperienced plan advisors — who generally service this market based on other relationships with owners or management — will be less likely to want to service retirement plans under the new, more expansive definition of fiduciary that probably lies ahead.
