Three in five (75%) small business agree that so many Americans are financially unprepared for retirement that it has reached crisis levels, according a new small business survey by Nationwide Financial.

The report, however, said only one in five (19%) of these businesses offer their employees a 401(k) or other employee self-funded retirement plan.

This small number is due to small businesses need to reach a point of business maturity or critical mass to absorb the cost and administration of the current 401(k) retirement plan.

According to the Harris Poll of 501 small business owners released today, only 11 percent say they are likely to add an employee sponsored 401(k) plan within the next two years.

Sixty-nine per cent of small businesses say their business is too small and more than half say it’s too expensive for them to implement the 401(k) plan, according to the report.

Thirty-seven per cent of small business owners with more than six employees say they are under pressure from employees to offer a retirement plan, while four in five (78%) of these owners surveyed say having a retirement plan is effective in helping to attract qualified employees.

Nationwide Financial senior vice president of retirement plans Anne Arvia said their survey found that nearly half (46%) of small business owners were not aware or were unsure that an employee self-funded retirement plan could be offered without having to match employee contributions.

"The provisions in the Small Businesses Add Value for Employees (SAVE) Act before Congress will remove many of the barriers that have kept small businesses from offering their employees a retirement plan," Arvia said.

The report also highlighted that the SAVE Act encourages small businesses to pool together to offer Multiple Small Employer Plans (MSEP) that are much less expensive than single employer plans and simplify an employer’s administrative requirements.

According to the survey, 71% of owners say when selecting an employee self funded retirement savings plan it’s important that the plan has flexibility to match or not match employee contributions, and 62% say it’s important that multiple employers can group together to pool resources and reduce administration costs.

Four in five owners say when selecting a plan it’s important the plan has minimal amount of administration requirements and can be offered at a low price, while three in four owners say it’s important that the plan can be converted to better meet their needs as their business grows.