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For Release: Thursday, December 1, 2011

Contact: Herb Perone
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Small Business Owners Overwhelmingly Support Proposal to Extend Lifetime Pension Benefits to Private-Sector Employees, NCPERS Study Finds

Washington, DC – The vast majority of small business owners – an overwhelming 82 percent – support the concept behind a proposed new retirement plan that would provide their employees with a guaranteed monthly pension benefit for life after they stop working. And nearly seven out of 10 owners – 69 percent – say they would be interested in adopting such a retirement plan for their own businesses.

These and other findings of a survey of 500 small business owners were released today by the National Conference on Public Employee Retirement Systems (NCPERS), which formally launched its Secure Choice Pension (SCP) proposal in September. The SCP plan, modeled on the public pension system, would allow private-sector employers to provide workers who are not in a pension plan with a guaranteed, lifetime retirement income that would be immune to stock market fluctuations and economic downturns.

NCPERS’s national telephone survey was conducted by Lake Research Partners and The Tarrance Group in mid-September.

“While Wall Street focuses narrowly on next quarter’s profit statements, the small business owners on Main Street take a much longer view – and they know that the long-term health of their businesses depends heavily on loyal, productive employees,” said Hank Kim, Esq., NCPERS executive director and counsel. “Our survey shows clearly that small businesses, which truly are the engine of American economic growth, want to offer retirement benefits to their employees – not just because they feel a moral obligation to do so, but because they believe it’s good for business and their bottom lines.

“Surveys show that after watching Great Recession wipe out significant value from their 401(k) balances, most private-sector employees want the security of lifetime pension benefits,” Kim said. “And to effectively address America’s retirement security crisis, workers need all three legs of the retirement security stool – pension benefits, Social Security and personal savings like 401(k)s. Our SCP proposal is a viable response to workers’ desires, employers’ business needs and America’s overall retirement crisis.”

Among the key findings of the NCPERS small business survey:

  • Small business owners overwhelmingly support the SCP proposal, regardless of whether or not they already provide a retirement benefit to their employees. Among all small business owners, support ran at 82 percent. Support ran slightly higher among those who already offer retirement benefits, at 84 percent. Even among owners who offer no benefits, support registered at 80 percent.
  • Political affiliation had no significant impact on support for the SCP. Support among Democrats, who made up 31 percent of the respondents, was 82 percent. Support among Independents, who made up 36 percent of the respondents, was 84 percent. Support among Republicans, who made up 33 percent of the respondents, was 80 percent.
  • Three out of four small business owners who already offer retirement benefits (75 percent) expressed interest in adopting the SCP for their own employees. Fully 59 percent of small business owners who currently offer no retirement benefits are interested adopting the SCP. Among all business owners, 69 percent expressed interest in offering the SCP to their employees.
  • The vast majority of small business owners (82 percent) agree that offering a retirement benefit helps to recruit and retain good employees.
  • Small business owners are acutely aware of the need for better options for retirement savings. More than half (56 percent) worry about their own retirement security and nearly two-thirds (65 percent) worry that their employees will not have enough money to retire.
  • Almost three-quarters of small business owners (73 percent) feel a responsibility to provide some kind of retirement benefit.
  • Most small business owners (83 percent) say their employees would like a more secure option for their retirement savings.
  • Half (50 percent) of small business owners say retirement benefits are too complicated to administer, while 63 percent say retirement plans are too expensive.

As envisioned by NCPERS, the SCP would be a public-private enterprise. Each state would establish its own SCP, which private-sector employers would join. Both the participating employers and employees could make regular contributions to the SCP. SCPs would give participants the benefits of lower costs, because of the efficiencies and economies of scale available to large pension plans. It would also give participants the benefit of higher returns because SCP assets would be pooled and managed by professionals.

“The SCP would address the private sector retirement security crisis through a guaranteed, affordable, sustainable pension,” Kim said. “With the SCP, retirement security need not continue to be an elusive goal, even for those who already have, or who already provide, retirement benefits.”

NCPERS’ full proposal for the Secure Choice Pension, as well as NCPERS’ small business survey, are available at www.retirementsecurityforall.org.

About NCPERS

The National Conference on Public Employee Retirement Systems (NCPERS) is the largest trade association for public sector pension funds, representing more than 550 funds throughout the United States and Canada. It is a unique non-profit network of public trustees, administrators, public officials and investment professionals who collectively manage nearly $3 trillion in pension assets. Founded in 1941, NCPERS is the principal trade association working to promote and protect pensions by focusing on advocacy, research and education for the benefit of public

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