Update: The Retirement Knowledge Gap

Say what you will about the current economy, one thing is certain: With a jobless rate of 4.5 percent, the nation is pretty much at full employment. Most small business owners are already painfully aware of the situation. Many report that they are struggling to hire and retain workers.

But one highly desired benefit could make the difference -- a retirement plan, according to a new study by Fidelity Investments.

The study suggests that the cost of setting up a plan would be more than offset by the ability to improve hiring and retention. The company surveyed 338 workers at small companies with retirement plans, and 49 percent said they would not take a job at a company without one. In addition, 68 percent said a retirement plan was "critical" or "very important" to attract and retain employees.

Yet when Fidelity posed a similar question to 992 owners of companies with five to 100 employees, only 36 percent thought a retirement plan was "critical" or "very important." Although administrative costs account for about 1% of monthly expenses for most small business plans, 46 percent of those without plans cited cost as the main reason.

I reported two weeks ago on the looming retirement crisis facing small businesses. More than 60 percent of small business owners who answered one survey said they did not offer a retirement plan for their employees, and 47 percent said they were unsure about how they plan to handle their own retirement. This latest study reinforces the point I made in my column. Small business groups must step up and educate owners on this critical issue.

A retirement knowledge gap clearly exists and needs to be closed.