In a recent survey of 501 small-business owners, Nationwide Financial also found that half of these business owners are unaware of the option to sponsor a self-funded retirement plan, where employees pay for the administrative costs.

What they are aware of, however, is the retirement crisis facing this country; 75% of small-business owners agree that such a large number of Americans are financially unprepared for retirement that it has reached crisis levels. Yet only one in five (19%) of these businesses offer their employees a 401(k) or other employee self-funded retirement plan.

Speaking to PLANADVISER, John Carter, president of Nationwide Financial Distributors, believes this is a great opportunity for financial advisers.  Even though many small-business owners believe they do not have the resources to offer a plan, this does not mean they don’t want to offer one – many want to. Seventy-eight percent view offering a retirement plan as an effective way to attract qualified employees.

So what is inhibiting them from sponsoring a plan? The primary reason is that small-business owners think their company is too small (69%) and the second most common reason is that the business cannot afford the cost (53%). Twenty-four percent of businesses with six or more employees also cite the burdensome administrative work that goes along with sponsoring a plan.

To overcome these inhibitors, Carter said that Nationwide supports the SAVE Act.  The SAVE Act – H.B. 4742, sponsored by Ron Kind (D-Wisconsin) and David Reichert (R-Washington) – would encourage small businesses to pool together to offer Multiple Small Employer Plans (MSEP) that are much less expensive than single-employer plans and simplify an employer's administrative requirements.   

According to the survey, 71% of owners say when selecting an employee self-funded retirement savings plan, it's important that the plan has flexibility to match or not match employee contributions. Four in five owners say when selecting a plan it's important the plan has minimal amount of administration requirements and can be offered at a low price. Three in four owners say it's important that the plan can be converted to better meet their needs as their business grows.  All of these things would be more readily available if the SAVE Act becomes law, says Carter.

Harris Interactive Inc. conducted 501 online interviews of small business owners in the U.S. with 1-100 employees between August 9 and September 23, 2011.