More small businesses offer employees retirement plans than ever before

More small businesses are getting their employees ready for their golden years.

Nearly one-third (30%) of US small businesses (those with between two and 99 employees) offered their employees a retirement plan in 2025, up from 19% in 2019, according to a recent report from payroll platform Gusto. That means 21.1 million small-business employees had access to an employer-sponsored retirement plan last year, up from 15.5 million six years prior.

“It’s always been considered kind of a big-company benefit, even though it is [one of the] most-requested benefits of all employers,” Kevin Busque, Gusto’s head of retirement, told HR Brew.

You get a retirement plan, you get a…Retirement plans have become an increasingly common benefit among small businesses for a couple of reasons, Aaron Terrazas, a Gusto economist, told HR Brew. Chiefly, many states require employers to offer employees a Roth Individual Retirement Account (IRA), he said.

New York passed legislation in November requiring private employers with more than 10 employees to auto-enroll employees in its state-sponsored Roth IRA, HR Brew previously reported. Similar programs exist in 20 other states, including California, Maine, and Virginia.

“These policy trends were there. They were important. In some ways, they kind of set the fireplace, and then the economy lit the spark,” Terrazas said.

Retirement benefits are also increasingly seen as a retention and recruitment tool for small- and medium-sized businesses, he added, as many of them have struggled to compete with large companies throughout history.

“The very tight labor market that we saw a couple years ago created an incentive for businesses to add these lures to retain their employees,” Terrazas said. “We know that there’s a strong link between the availability of these plans and employee retention.”