April 16, 1999
Paul Yakoboski
(202) 775-6329, EBRI
Danny Devine
(202) 775-6308, EBRI


WASHINGTON, DC--Small business decision makers vary widely in their awareness and support of recently proposed individual Social Security accounts, according to a new article published by the nonpartisan Employee Benefit Research Institute (EBRI).

The article, appearing in the April EBRI Notes, discusses the results of a recent survey of 500 small business owners concerning their attitudes toward reform initiatives that are currently being considered by policymakers in Washington. The survey, commissioned by EBRI and conducted by Mathew Greenwald & Associates, specifically addresses the administrative responsibilities that may be imposed if employees are allowed to divert a portion of their payroll taxes into individual accounts.

Social Security individual accounts could be administered through the current payroll tax deposit and wage reporting system, with employers reporting either annually or quarterly, or through a design that closely resembles 401(k) plan administration.

“This survey's results should prove useful to policymakers who are interested in individual Social Security accounts and are concerned about how policy design will affect the political support of the small business community for this type of reform,” said EBRI President Dallas Salisbury.

Some of the survey's key findings:

  • Three-quarters of small employer decision makers have heard about the reform proposals. Nearly 60 percent say they favor this type of reform. However, 32 percent say they are following the debate not too closely and 28 percent are not following it at all.
  • One-third of the respondents say they have thought about the fact that employers might be required to help administer a Social Security account system. When first asked how they felt about being mandated to do so, 40 percent reacted positively and 48 percent reacted negatively.
  • Although a majority of small-business decision makers favor individual accounts in general, majorities to not favor any one of the three possible administrative approaches included in the survey. Almost one-quarter would not favor any of the three approaches, even if these were the only ways a Social Security individual accounts system could pass Congress. In addition, 6 in 10 of these respondents say there is no type of employer-administered system they would support.
  • As a whole, the small business community is not willing to spend more for one approach than for another. For each approach, 2 in 10 respondents said they would be unwilling to pay anything, 15 percent would be willing to spend up to $500 annually, 1 in 10 would be willing to spend between $500 and $999, and one-quarter would be willing to spend $1,000 or more per year.
  • Two in 10 small-business decision makers say that considering employers' possible role in administering Social Security individual accounts has changed the way they feel about this type of reform. Thirty-two percent say they are now more likely to favor it, while 61 percent are now less likely to favor it.

EBRI Notes™ is a monthly periodical providing up-to-date information on a variety of employee benefit topics. Members of the press may request complimentary copies of EBRI Notes no. 4, which features “Small Employer Survey on Individual Social Security Account Administration,” from Alicia Willis at (202) 775-9132. Reporters may also obtain an executive summary of the article at Full-text copies of the article are available online by contacting Danny Devine (202) 775-6308, e-mail: for the “press only” password. Others may purchase copies for $25 prepaid by calling (410) 516-6946.

EBRI is a private, nonprofit, nonpartisan based in Washington, DC. Founded in 1978, its mission is to contribute to, to encourage, and to enhance the development of sound employee benefit programs and sound public policy through objective research and education. EBRI does not lobby and does not take positions on legislative proposals.

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