Why should employers offer a workplace retirement plan?
June 9, 2025 | 3 minute read
There’s a reason so many businesses offer retirement plans as part of their employee benefit packages. They’re not only great for employees—they’re great for the companies that offer them, too. If you’re wondering whether you should establish a workplace retirement plan, you’ve come to the right place. Read on and find just what you need to know to feel confident about choosing the right plan for your business.
Winning the war for talent
Lorna Sabbia, Managing Director, head of Bank of America Workplace Benefits™, explains how benefit plans can be the lynchpin of your efforts to attract and retain top talent.
The bottom line and beyond: Business benefits
The numbers say it all. Employers who offer workplace retirement plans are helping fuel their businesses along with their employees’ financial wellness.
Attract and retain top talent — 72% of plan sponsors either agreed or strongly agreed that offering a robust retirement benefits plan is an effective employee recruitment and retention tool.1 And 39% of employees listed competitive workplace benefits as the top reason they stayed with their employer.2
Tax advantages — The tax benefits available to employers who offer a workplace retirement plan can actually offset the cost of the plan itself. That’s because employer contributions and plan expenses are generally deductible from the employer’s income. Tax credits for small businesses are also available.
Flexible plan design — Employers can choose to make matching contributions, profit sharing contributions, other special types of contributions or no contributions at all. Some plans also let you decide how soon your employees fully vest. This can be a valuable incentive for retention.
Improved employee morale — Retirement plans help employees feel more secure about their futures. This can improve morale, which, in turn, may boost productivity and reduce turnover.
Why do small businesses provide 401(k) plans?
Reasons companies provide 401(k) plans
Among companies with 1 to 49 employees and assets of <$50MM
Source: 2025 Bank of America Workplace Benefits Report Survey
A changing regulatory landscape
Many states in the U.S. are moving toward requiring employers to offer retirement plans to their employees. Providing your employees with access to a retirement plan now can help ensure you stay ahead of legislative requirements, even if your state hasn’t yet enacted a mandate. To learn more, check out this fact sheet about state retirement plan mandates and how they might affect your business.
Bank of America Workplace Benefits™ for small business owners and entrepreneurs
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How do employers choose and set up a workplace retirement plan?
Picking the right plan for your business and getting it off the ground is easier than you might think.
Bank of America Workplace Benefits™ is here to help your business — and your employees — thrive
Find out how our experienced team can help you build a benefits plan that truly fits your business's needs.
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