Of small-business owners surveyed, 23 percent said they don’t know how to manage 401(k)s. (Photo: Getty)

When it comes to 401(k) plans, less than a third of small-business owners provide them to their employees — and nearly half of the ones who don’t just don’t see the value in such plans.

And maybe that’s because they haven’t taken a long-term view of how 401(k)s should be used and viewed — although that appears to be changing.

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The August 2016 Surepayroll Small Business Scorecard found that not only do 66 percent of small-business owners not offer their employees a 401(k) plan, 42 percent of those nonproviders don’t think 401(k)s add value. Beyond that, 35 percent said the fees are too expensive and 23 percent said they don’t know how to manage 401(k)s.

But the scorecard also found that 34 percent of small-business owners see 401(k)s as the primary way they’ll save for retirement; 28 percent of small-business owners currently offer 401(k)s, and 6 percent said that they plan to add one soon.

One reason business owners may be reluctant to offer 401(k)s could be the way they view such plans — more as retirement savings than as a source of retirement income, according to the MetLife 2016 Lifetime Income Poll.

The MetLife poll found that, while 85 percent of plan sponsors agreed that the core purpose of a defined contribution plan should be to serve as a lifetime income source during retirement, only 6 percent of them say their 401(k) plan includes a lifetime income option.

That 85 percent, by the way, is up from only 9 percent who made the distinction on what 401(k) plans should do when asked the same question in 2012.

But just because they view their plans differently, that doesn’t mean they’ve taken action to make them function differently.

The vast majority (92 percent) appear to be looking for a safe harbor from the U.S. Department of Labor before they add income annuities to defined contribution plans, and 76 percent would rather be allowed to rely on certifications from the annuity provider based on the regulatory process carried out by a state insurance commissioner, rather than to conduct the solvency due diligence process themselves as part of their regular due diligence process for plan providers.

One way that transition to lifetime income provider might be effected is if there were a requirement to communicate defined contribution plan balances in terms of lifetime income, as well as in terms of total account balance, on benefit statements. That’s something 96 percent of plan providers could get behind.

Oh, and those small-business owners?

While 34.4 percent of respondents to the SurePayroll scorecard said the way they themselves primarily save for retirement is in a 401(k), 24.7 percent said they do so with earnings from their businesses; 13.7 percent rely on a Roth or traditional IRA; 9.3 percent invest in real estate (outside of their homes); 4.5 percent are counting on their homes increasing in value; and 8.9 percent put away money in stocks, bonds and cash outside of a retirement account. But 4.8 percent of those small business owners “don’t have a plan to save for retirement.”