Small businesses shun retirement plans over cost, complexity fears
Only about half of U.S. private-sector workers participate in an employer-sponsored retirement plan at any given time — a gap driven almost entirely by small employers, according to new research from the Center for Retirement Research at Boston College.
The lack of retirement plan offerings by small businesses is a significant concern for the construction industry, where many workers are employed by small to medium-sized contractors and subcontractors. The cost and complexity of setting up and maintaining a retirement plan can be a major deterrent for small business owners, who may not have the resources or expertise to navigate the various options and regulations.
This gap in retirement planning can have long-term implications for construction workers, many of whom may not have access to other sources of retirement income, such as a pension or a union-provided plan. As a result, many construction workers may be relying on Social Security alone or struggling to save for retirement on their own. This can lead to financial insecurity in retirement, which can have a ripple effect on the broader economy.
Construction industry stakeholders should watch for potential policy solutions aimed at increasing access to retirement plans for small business employees. Some possible approaches include expanding tax credits for small businesses that offer retirement plans, streamlining regulatory requirements, or promoting pooled retirement plans that allow multiple small businesses to share the costs and administrative burden of offering a retirement plan.
Originally reported by housingwire.com. ConstructionNews adds analysis for real estate & property readers.