To close the retirement savings gap, several states now require small businesses to offer retirement plans to employees—or enroll them in a state-run program. This shift creates new opportunities for annuity sales and financial guidance, as many small businesses seek help navigating complex mandates.
As of 2024, more than 40% of U.S. small businesses still do not offer retirement benefits or workplace retirement savings plans to their employees.1 While this represents meaningful progress from earlier years, a significant coverage gap remains, particularly among smaller employers that cite cost and administrative complexity as barriers to offering a plan.
Business owners now have three options
1. Enroll in the state-run program
If defaulting to the state program, employers must register with the state, enroll eligible employees, set up payroll deductions and provide regular notices. Fees vary by state and employees can opt out after enrollment.
2. Offer a qualified retirement plan and be exempt from the mandate
• 401(a) – Qualified Plan (including profit-sharing plans and defined benefit plans)
• 401(k) plans (including multiple employer plans or pooled employer plans)
• 403(a) – Qualified Annuity Plan or 403(b) Tax-Sheltered Annuity Plan
• 408(k) – Simplified Employee Pension (SEP) plans
• 408(p) – Savings Incentive Match Plan for Employees of Small Employers (SIMPLE) IRA Plan
• Payroll deduction IRAs with automatic enrollment (CA only)
3. Ignore the mandate—and face the fines
Fines range from $100 to $500 per employee for non-compliance.
Why should business owners work with you?
You offer more than just compliance—you offer value:
Tax credits: Help clients take advantage of federal credits for plan startup and administration
Zero fees: Competitive plan structures with no direct employer fees
Custom strategies: Tailored retirement solutions that fit their business model
Your expertise: Personalized support navigating state rules and product choices
Below are just a few of the resources National Life provides to support you in this market.
We’re Here to Help
Click here to contact your Retirement Services Relationship Manager.
1 Small Employers’ Economics of Offering Retirement Savings Plans | The Pew Charitable Trusts July 2024
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