It would cost $500 to set up a plan for 10 employees through Sharebuilder, and between $70 and $80 per month for administration costs, Robertson said. If the plan sponsor wants to do an employer match, that comes out of their own pocket.

One enticement for small businesses, with fewer than 100 employees, is that they can take a tax credit for the first three years they offer their retirement plan to offset administration and setup costs. The credit equals 50 percent of the cost to set up and administer the plan, up to a maximum of $500 per year. To qualify, businesses must have had 100 or fewer employees who received at least $5,000 in compensation the preceding year, according to the 401khelpcenter. At least one participant must be a non-highly compensated employee.

Compared to health care, offering a retirement plan is a low-cost benefit, Robertson said. "If people are looking to save money, it is the one place small businesses can compete effectively with big businesses."

ShareBuilder 401K is unique in the market because it takes the fiduciary burden off the backs of the small business owner.

"When you get a 401(k) plan, you have a duty to run it in the best interest of your employees. If things go wrong, you are liable. That can be a scary area for small business owners," Robertson said.

When business owners sign up for a 401(k) plan, they usually go through an advisor or a registered representative. They are given a menu of up to 100 funds that they get to choose from. The owners choose the investments.

ShareBuilder 401K plans are sold directly to plan sponsors. "We don't use intermediaries. All of our guys are licensed. It is one of our advantages versus being resold through registered representatives and advisors. We put a low-cost offering into place. We are starting to see other folks coming into the market, but they are not priced where we are," he said.

He added that through historical data, it has been proven that "low-cost funds beat high-cost funds. We've simplified the decision process. It is how we are providing value to our clients. We are taking on the fiduciary role. Giving them that protection is something other plans lack," Robertson said.

The Department of Labor released a report in February 2008, looking at historical retirement data, going back to 1975. What it found is that the number of defined benefit plans for companies with fewer than 100 employees steadily decreased and the number of defined contribution plans has increased or held steady over that time.  The last figures in the study are for 2005. It shows that there were 36,058 defined benefit plans and 564,205 defined contribution plans for companies with fewer than 100 employees in 2005.

A report released in December 2010, looking at 2008 retirement data gleaned from Form 5500, found that the number of smaller plans, targeting fewer people, steadily declined between 2005 and 2008. In 2008, there were 37,231 defined benefit plans for companies with fewer than 100 employees. There were 10,531 defined benefit plans with less than $1 million in assets, and 145,131 defined contribution plans with less than $1 million in assets.

There were 488,660 defined contribution plans for those with fewer than 100 employees.

Vanguard, which has traditionally served larger corporations with retirement plans, announced this month it will offer plans for smaller businesses. It will work with any business that has less than $20 million in assets, said Kathy Fuertes, head of Vanguard's Retirement Plan Services for small business.

"We have been known historically for working with the [larger] end of the market. We felt all along that smaller businesses deserved the same type of low-cost, high-quality, transparent, full-service offerings we have been providing in the market for years," Fuertes said. "We found a solution, partnering with Ascensus, that gives us the ability to offer that same type of model, a low-cost model, to the lower end of the market."

Ascensus is a leading record keeper for small plans. "They've developed a set of technology and a set of administrative processes, a model that is very scalable for them to support small businesses. We're taking advantage of them being familiar and having this scalable model for the small business solution," she said.

Vanguard is offering its small business 401(k) and profit-sharing plans to plan sponsors and financial advisors who have the ability to sell a fee-based solution to their clients. "Vanguard index and target date funds are what we would naturally lead with because those are low-cost solutions for people saving for retirement," Fuertes said.

Plan sponsors also have access to other Vanguard exchange-traded funds and active funds and large offerings of non-Vanguard active mutual funds or stable value options. The company also is putting Vanguard money markets in there as well.

"What we're trying to come to market with is a solution that makes it very cost-effective from an all-in fee basis, which includes record keeping and investment management fees. We're trying to provide that very low all-in cost for plan sponsors and participants to take advantage of a 401(k)."

A recent Deloitte and Investment Company Institute study found that median all-in fees were 1.27 percent of plan assets. If Vanguard were to work with a company with $5 million in plan assets, with an average of $50,000 per plan participant, the all-in fees would be .32 percent of plan assets, Fuertes said.

"Every plan is going to be different, based on the investment options, demographics and ancillary services they want to add on. It is going to be among the lowest cost in the industry based on an all-in fee perspective," she said.

There is still very low penetration in the retirement plan market for businesses with fewer than 50 employees, Robertson said. Only 20 percent of that market offers a 401(k) or IRA option.  When the other 80 percent are asked why they don't have a plan, the response is that they don't have enough employees or can't afford a match, he said.

"They just aren't aware that you can be a business owner, a self-employed person and have a 401(k). You don't have to have a match in your plan. It may restrict how much you can put into your plan, but you can do profit sharing in the plan in good years," he said. "Getting folks to pay attention and understand, that is one of the biggest issues in the small business space."

ShareBuilder 401K just extended its retirement options to target mid-size businesses. The company now will serve companies with as many as 1,000 employees, but its primary market is the 1- to 250-employee firms.