The recession had little effect on the low participation rate of small business owners in signing up for retirement plans, according to a pair of new studies from the U.S. Small Business Administration.

Winslow Sargeant

The studies compared the retirement holdings of small business owners with those of wage and salary workers. The research indicated stability in the individual account retirement assets of the small business owners, despite the effects of recessions.

While the studies relied on different databases and focus on different subgroups, both reports found that small business owners continue to be significantly less likely to have retirement plans than workers overall. 

“These studies give us new information about the ongoing challenge of retirement plan coverage for small business owners,” said SBA chief counsel for advocacy Winslow Sargeant in a statement. “The fact that business cycle effects appear to be minimal suggests that closing the retirement plan gaps will require longer term strategies by policy makers, plan administrators, and owners.”

A new study by Jules Lichtenstein, an economist with the SBA’s Office of Advocacy, found that having an underwater mortgage did not have a significant effect on the likelihood that a small business owner invested in retirement assets or on the amount accumulated.

Financial Viability and Retirement Assets: A Look at Small Business Owners and Private Sector Workers uses 2009 data from the Survey of Income and Program Participation to look at a broad spectrum of individual account retirement assets held by the self-employed and by private sector wage and salary workers age 15 and older. Lichtenstein’s study found that smaller and more financially vulnerable business owners have less invested in retirement assets than their larger or financially stronger counterparts.

A second study found both the probability of having a retirement plan and the value of IRA/Keogh accounts to be largely stable through recessions. Retirement, Recessions, and Older Small Business Owners by Tami Gurley-Calvez, Kandice Kapinos, and Donald Bruce, uses the 1992-2010 Health and Retirement Study to focus on individuals nearing retirement. The study found that older small business owners with IRAs and Keogh accounts are likely to have larger amounts of such assets than comparable private and public sector workers over age 50.

The two studies can be found at www.sba.gov/advocacy.