AmiSight 3/4: Small Businesses Picking up the Pace on Offering 401(K) Plans

Once believed to be a luxury or unattainable goal, small businesses are now offering retirement plans to employees at a higher clip.

According to The Wall Street Journal, the number of workers at small businesses with access to 401(k)-style plans has grown by nearly six million since 2019, citing a recent report published by Gusto, a payroll and benefits provider.

Although many small businesses lagged behind larger ones in offering 401(k)s due to factors like cost and time involved, a more competitive job market and laws in several states that require many employers to give workers a way to save eventually made them bite the bullet.

Some of the costs have come down in recent years thanks to enhanced tax credits and the rise of lower-cost online providers catering to small businesses. Congress in 2019 also created a new type of plan, called a pooled employer plan – or PEP – allowing unrelated firms to join in the same offering.

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