AARP survey shows small business support for more retirement options for workers

Respondents to a statewide poll conducted by AARP showed overwhelming support for legislation to make it easier for businesses to access retirement savings choices for workers. The results of the survey were released Monday (March 3).

The AARP Small Business Survey of 504 small business owners across Arkansas showed 79% support for a privately managed, ready-to-go retirement savings option for small business owners that would enable them to offer workers a way to save for the future. And 88% agreed that state lawmakers should support a bill that makes it easier for small business owners to access a retirement savings option for their employees and themselves.

HB 1335, sponsored by Rep. Les Warren, R-Hot Springs, is currently a shell bill. Warren, who co-chairs the Joint Public Retirement Committee and has years of experience working in the trust division of a bank, said the purpose of the bill is to provide a retirement plan option for employees whose employers don’t offer a 401(k) or similar option.

“We’re trying to get people to save for retirement so they won’t need a handout,” Warren told Talk Business & Politics.

The “Arkansas Saves” plan will be similar to the popular 529 college savings plan that allows people to put aside part of their paychecks for college tuition for their kids and family members. Warren’s plan will allow employees to steer a percentage of their paychecks into Arkansas Saves, which will be administered by the Treasurer of State’s office, just as the 529 program is.

Warren ran a similar piece of legislation a few sessions ago, but it stalled in the Senate after passing the House. He said when he fleshes out specifics of the new bill, it will allow an employee using the plan to move their money to another retirement plan when it hits a certain threshold, if the employee chooses.

More than 50% of Arkansas’ private-sector workers do not have access to a retirement savings option at work, and 30% of Arkansans depend on Social Security as their only source of retirement income. AARP found that 81% of small businesses are concerned about their employees not having enough money to cover health care or living expenses when they retire.

“Small businesses recognize there is a retirement savings crisis in Arkansas, and they want lawmakers to take action,” said Ashley McBride, AARP Arkansas state director. “More than 514,000 Arkansans cannot access a retirement savings plan at work. If we make it easy for more workers to save through payroll deduction, small businesses will benefit, taxpayers will save money, and workers will build savings that will provide more options in their retirement.”

AARP commissioned Alan Newman Research to field the Arkansas Small Business Owner Survey between Oct. 2 and 25, 2024. Interviews were conducted by cell and landline phone among 504 small business owners or decision-makers about employee benefits at companies with one to 100 additional employees.

According to Pew Charitable Trusts Research, $2.7 billion could be saved by the state over 20 years simply by implementing a public-private retirement savings option.

“AARP Arkansas has a mission to help people choose how they live as they age,” said Chris McCoy, associate state director of advocacy and outreach for AARP Arkansas. “To truly be able to choose, you have to start saving for retirement early, preferably from job one. The plan we’re proposing, Arkansas Saves, is a big step forward in helping small businesses offer retirement savings options for their employees without burdening the small businesses that are the backbone of Arkansas’ economy.”

Missouri is among the latest states to pass retirement savings legislation, similar to Arkansas Saves. More than 11 states have adopted public-private retirement savings programs with assets under management exceeding $839 million.