People working for small businesses are at a disadvantage when it comes to saving for retirement, because their 401(k) plans don't provide as much potential as large employers' plans do.
That's according to a survey from the Guardian Insurance & Annuity Company, Inc., which found that not only are participants in small companies' retirement plans missing out on available investment options, they're also handicapped by fewer features and services—including education options.
"The Guardian Small Plan 401(k) RetireWell Study 2.0: What's Working and Not Working for Small Plan Participants" indicated that plan participants at small businesses may not have all of the tools and resources available when compared to large businesses to optimize retirement savings.
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Some of the shortcomings the study found in smaller plans were less diversity among available investment options; inability to purchase stock in the company; and lack of access to fixed rate accounts.
In addition, the study also found that small market participants are both less knowledgeable and less engaged in their plans than people who participate in large-company plans.
This, of course, is not good news, considering that small businesses provide 55 percent of all jobs, according to the Small Business Administration, and 66 percent of all net new jobs since the 1970s.
Also, with people increasingly relying on 401(k) plans rather than defined benefit plans, as well as being increasingly poorly prepared for retirement, smaller plans with smaller options makes the outlook somewhat bleaker in an already pessimistic view.
"Participants need more education and support from their employers to make better decisions and realize their retirement dreams," Douglas Dubitsky, vice president at Guardian Retirement Solutions, said in a statement.
Dubitsky also said, "Americans rely almost exclusively on their 401(k) accounts for their retirement income, so making access to a broad range of investment options and support for employees of every size company is critical for better retirement outcomes."
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