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RAYMOND M. NOWICKI shares something in common with many other small businesses. Two years ago, he set up a retirement plan at his six-employee company, following a trend that has been sweeping across the nation.

But what distinguishes this Cheektowaga businessman from others is that Nowicki has also helped many other small and medium-sized companies to benefit from an expanded menu of retirement plan options. He operates Nowicki and Co. LLP, an accounting firm on Union Road.

"We have a house full of CPAs over here, so setting up a retirement plan was a no-brainer for us," said Nowicki, who also chairs the statewide advisory board for New York's Small Business Development Centers.

A recent survey found that 167,000 small businesses expect to start retirement plans for their workers in the next two years. Depending on the source, it is estimated that between 30 percent and 50 percent of all companies with fewer than 100 employees currently offer some type of retirement savings program, with the number swelling each quarter.

A study conducted by the SpectremGroup, a San Francisco-based financial services research firm, concluded that 1.6 million additional workers in small businesses will be allowed to participate in new retirement plans by the year 2001.

"We're seeing a growing number of very small businesses set up plans as the result of legislative changes that make it easier to do so," said Nowicki. "In the the past, many small companies couldn't afford to set up 401(k) programs because administrative costs were so high."

As federal officials aim to ease long-term pressures on Social Security, they have expanded retirement plan alternatives for small businesses. Owners can now choose low-cost, low-maintenance Simplified Employee Pension (SEP) plans, Savings Incentive Match Plans for Employees (SIMPLE), KEOGH plans, profit-sharing plans and other options.

"We're seeing an explosion in interest at the lower end of the market," said Edward T. Nowak, regional manager of pensions for Principal Financial Group. "Companies are competing for labor in an extremely tight market and a lot of businesses are having a tough time recruiting."

Nowak said the new focus on retirement programs in the small business arena mirrors a growing recognition that many job applicants no longer focus exclusively on salary when evaluating job opportunities. Benefit packages -- including retirement plans -- can be powerful incentives for attracting and retaining quality employees.

"Pay is still a critical ingredient, but benefit packages are coming under increased focus," Nowak said.

For obvious reasons, there has also been a dramatic increase in the number of financial service firms that offer retirement plan services targeted to small businesses. Nowak said new computer software programs and advances in Internet communications have made it feasible to offer smaller businesses the same level of services that had previously only been available to companies with deep pockets.

Even though the range of retirement plans has been broadened to include options with lower administrative costs and greater flexibility, millions of small businesses across the nation don't offer their workers retirement plans.

A survey released this summer by the American Savings Council and other institutes cited three key reasons why many companies don't offer such plans. Half of the respondents said their revenue was too uncertain, while 42 percent said they had too many seasonal or part-time workers to even consider implementing retirement plans. About 30 percent still believed that offering the benefit would saddle them with onerous administrative costs.

Nowicki said it's easy to understand some of the concerns.

"Nothing is certain in business, especially revenues. But some of these plans offer a lot of flexibility and a retirement plan should be viewed as a cost of doing business," Nowicki said. "You need to keep valued workers."

Some plans also enable owners to save more toward retirement than previous alternatives.

Experts said offering SEPs and SIMPLEs are usually best for start-up companies or newer enterprises that don't know what their profitability will be. The SIMPLE-IRA debuted in 1997 and is described by some as a "super IRA" that can be picked as an option by any business that has 100 or fewer employees and doesn't have any other retirement plan. It pairs salary deferral with ease of administration and low cost. The option spares companies from filing complicated reports with the IRS and allows the employer to make flexible contributions within prescribed limits.

At the other end of the spectrum are options like the Money Purchase Pension Plan (MPPP) which are funded solely by employers, require fixed contributions and generally have more administrative costs.

Each option has different advantages and pitfalls. That's why it's important for financial advisers to assess the needs of a specific company, then choose an appropriate retirement plan.

"We still get so many calls from employers who say 'we want to set up a 401(k) plan. But the menu is far broader than it was 10 years ago and the No. 1 goal is to design a plan that fits the business," said Nowak.

Principal Financial Group is an Iowa-based company that administers retirement plans for about 40,000 companies, many of them small and medium-sized.

Over at Nowicki and Co., accountants estimate that at least half of their small business clients have some type of retirement savings plan.

"But we still don't think enough companies are on board yet," said Nowicki. "Owners have to recognize that good workers come at a premium these days."

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