October 31, 2023

Small business owners on the cusp of offering employee retirement plans

According to a new survey, the passage of the SECURE 2.0 Act brought a 7% uptick in interest in offering retirement plans to employees, but barriers persist

LOS ANGELES, October 31, 2023 — Small businesses account for 99% of U.S. businesses and employ nearly half of private sector employees.In today’s competitive market, business owners are increasingly recognizing the advantages of offering retirement plans for their employees, according to a new survey from Capital Group, with 69% of owners citing helping employees save for the future as a primary driver to offering a plan. The secondary drivers were retention and attraction of top talent (47% and 40%, respectively). 

However, despite a 7% uptick in interest in offering a retirement plan post-SECURE 2.0 Act, and with 74% of small business owners indicating they’re ‘likely’ to implement one in the next two years, nearly 40% of owners still believe their company isn’t big or stable enough to offer a retirement plan. Additionally, 35% say limited administrative resources are holding them back and 32% more small business owners feel they lack the knowledge to offer a retirement plan or don’t know where to start. 

To better understand the challenges and motivations of both small business owners and their employees, Capital Group, a leading provider of retirement plans to small businesses, surveyed over 600 business owners and employees between May 17 to June 16, 2023.*

“Our findings reveal that the passing of the SECURE 2.0 Act in late December 2022 marked a significant stride towards enabling more small business owners and employees to pursue retirement stability, though barriers remain,” said Renee Grimm, Senior Vice President, Retirement Plans, Capital Group.  “We’re seeing forward momentum, but something is holding small business owners back. Many seem to be on the cusp of offering their employees a plan and may simply need the guidance of a financial advisor to utilize and maximize the benefits available to them.”

The survey found: 

  • 57% of business owners are familiar with the provisions of the SECURE 2.0 Act, versus only 9% of employees. Small business owners with more than 50 employees are much more familiar with the provisions than those with fewer than 50 employees
  • Four out of five owners who offer a plan believe the SECURE 2.0 Act will benefit their current workplace plan for employees
  • Of the provisions the legislation provides, both owners (38%) and employees (45%) report being most interested in learning about penalty-free withdrawals for emergency expenses
  • To learn more about the legislation, half of owners and employees stated that online research is their top source for information, followed by a financial advisor or planner and social media

The survey also revealed that employees of small businesses who have access to a retirement plan are weathering the increased cost of living better and are 10% less likely to feel the impact of inflation over the past 3–6 months compared to employees without a plan. 44% of employees without a plan noted that retirement resources to help prepare for the transition to retirement and financial products and services are important for them, which they are not currently receiving today. 

“Capital Group’s singular mission is to improve people’s lives through successful investing. An important part of that is supporting the thousands of small business owners across the country as they help their employees save for a dignified retirement,” commented Ralph Haberli, Head of Institutional Retirement at Capital Group. “We are committed to lowering the obstacles that stand in the way of expanding access to a good retirement plan. Hearing directly from small business owners and understanding their challenges is so important for us to be able to deliver on our commitment to savers across America.”

For additional information and the full report, click here


Capital Group partnered with Escalent, a data analytics and advisory firm, to conduct an online survey of 615 small business owners and employees between May 17 to June 16, 2023. The groups included a mix of small business owners and employees aged 21 years and older. The small business owners surveyed included both those that do and do not currently offer an employee retirement plan.

About Capital Group

Capital Group, home of American Funds, has been singularly focused on delivering superior results for long-term investors using high-conviction portfolios, rigorous research, and individual accountability since 1931.

As of June 30, 2023, Capital Group manages more than $2.3 trillion in equity and fixed income assets for millions of individuals and institutional investors around the world. Capital Group manages equity assets through three investment groups. These groups make investment and proxy voting decisions independently. Fixed income investment professionals provide fixed income research and investment management across the Capital organization; however, for securities with equity characteristics, they act solely on behalf of one of the three equity investment groups.

For more information, visit capitalgroup.com.

Frequently asked questions – March 2023, U.S. Small Business Administration, Office of Advocacy.
Unless otherwise stated, all stats in this article based on the Capital Group survey described herein.


Natalie Marin (Los Angeles)
+1 (213) 615-4508

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