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Thursday, August 12, 1999 Number of Small 401k Plans to Grow Could an explosion in the small plan market be a very real possibility in our near future? Will the 401(k) plan be as common among small businesses as it is among large corporations? A new study from the Spectrem Group suggests that this may very well be the case. According to the consulting firm, there will be 167,000 firms with under 100 employees that will be adding retirement plans in the next two years. Spectrem estimates that there will be approximately 1.6 million participating in a company-sponsored retirement plan. "It's not suprising that small businesses are adding retirement plans. In the past few years, we've seen more focus among larger companies on retirement savings needs of their workers, as well as a tremendous reise in the level of public awareness of 401(k) and other plans. These trends are working their way down to the smaller end of the market," stated Catherine McBreen, head of Spectrem's Retirement Services Consulting Practice. Nonetheless, the study also found that 70% of companies in this class do not have a retirement plan nor do they intend to offer one. The survey also found the following:
Still, that optimism needs to be tempered with some pragmatism. Of the 7.6 million companies in this strata, 5.3 million (or 70%), have no intention of instituting retirement benefits at this point. Now, either those firms will remain true to their word, or they will change their minds. In either case, they represent either no sales or extraordinarily tough sales for marketing teams. The small plan market may be becoming a little easier to navigate, but it still has a long way to go. Printed from: MFWire.com/story.asp?s=24529 Copyright 1999, InvestmentWires, Inc. All Rights Reserved |