The Department of Labor and the Consumer Federation of America are urging small employers to start job-based savings plans for their employees.
In a webinar on Thursday, the two groups said that not only was starting one easy, but that such programs increased workers’ loyalty and cut their absenteeism.
“When employers provide workers with ways of dealing with financial issues, it increases employees’ appreciation,” said George Barany, the director of financial education at the Consumer Federal of America. “They can focus more on their jobs, in part because [they are] not getting calls at work from creditors and they have fewer financial stresses.”
The increased personal savings that come with job-based plans also blunt the impact of financial emergencies, so employees are absent and late to work less frequently, Barany noted.
Phyllis Borzi, the head of the Labor Department’s Employee Benefits Security Administration, said “choosing a workplace retirement savings plan is easier than you may think.”
She added that increasing the number of small businesses with retirement savings programs is vital to raising retirement security in America because less than half of the 5.6 million businesses with fewer than 100 employers in the nation have job-based plans.
In a presentation that lasted nearly an hour and a half, administration staff presented the advantages and disadvantages of a variety of retirement savings programs available with IRAs, defined contribution plans and defined benefit plans.
To see the presentation, go to www.dol.gov/ebsa and click on “Choosing a Retirement Solution for Your Small Business” at the bottom.