A retirement plan is a complex benefit – with many moving parts. If you’ve started looking already, you may have learned by now that even the simplest 401(k) can be a proverbial Can of Worms. And, while you don’t need to understand everything in that Can to find the right 401(k), you most certainly do need to know which things are critical when trying to compare 401(k) providers.
Do not despair: it’s possible to simplify the search and find the right 401(k) on your first try – with a little help from this resource, of course.
Your ultimate goal is to select a 401(k) provider that saves you time, and money, and minimizes your administrative work & compliance liability. Most importantly, your goal is to partner with an employee-focused 401(k) provider that has a track record of helping more employees join and save in the plan – leaving you with happier employees, a 401(k) plan that makes your benefits package even more attractive, and a plan that can grow as you grow. But first, you need to know a little about what you’re shopping for. That’s where this 401(k) Provider Worksheet comes in.
Six things to consider when searching for a 401(k)
1. Cost: Low costs are key, as they provide a greater affordable selection for employers, and help maximize savings for employees.
2. Plan design: Many modern plans will come with an intelligent default plan design, but options can help customize a plan – especially as you grow.
3. Plan administration: Minimizing the day-to-day administrative work of sponsoring a 401(k) is key – especially with no internal 401(k) expertise.
4. Plan compliance: Keeping your plan compliant with the Department of Labor and the IRS is a full-time job – let your provider deal with it if possible.
5. Investments: Your core investment menu, plus any investment options, are subject to fiduciary regulations – let your provider help as much as possible.
6. Employee experience: Helping your employees take full advantage of their retirement saving benefit is what this is all about. Make it easy for them and they will love you for it.
The quality and management of each element is critical to keep your 401(k) house in order. Each of these elements can be fully delegated or fully managed by you, it’s all a matter of how much internal expertise you have on the team (or are willing to hire), and how much time and liability you want to take on. Note: most modern 401(k)s for your company size assume that you have no internal 401(k)-dedicated staff or expertise, and no appetite for adding it.
Two more considerations
401(k) complexity: 401(k) providers are regulated by the Department of Labor, the IRS, and sometimes the SEC (when you work with a registered investment advisor). This alone makes the benefit a complex one. Asking the right questions will help you plan how much work and liability you take on internally, and how much you want to delegate to external partners.
401(k) transparency: Financial service companies are notoriously bad at being completely transparent about their fees, what they’ll be on the hook for after the contract is signed, and what liability they’re really taking off your plate. So, knowing what to ask will help you establish the transparency needed to really compare and select the right 401(k) provider for your company.
401(k) shopping – simplified
As we’ve noted already, finding and then selecting the right 401(k) provider for your startup or small business can be a challenging task. There’s a lot to consider when comparing 401(k) providers: investment options available to your employees, costs to your company and to your employees, plan design, employee experience, day-to-day administration, 3(16)/3(38) fiduciary services and more.
If you’re shopping for a 401(k) for the first time or simply need some help with streamlining your 401(k) evaluation process, then you're in the right place.
We’ve done some of the groundwork and created this 401(k) Provider Comparison Worksheet template to make life a little easier for you. This template will help you identify the key considerations to keep in mind when shopping around.
How to use this Worksheet
It’s easy – the first thing to do is open the doc, and the next thing is to make a personal, working copy of this Google Sheets resource. That’s it – just go to the “File” menu and select “Make a copy.” Save your copy in a convenient place and you’re ready to use it.
As you probably know, small to midsize companies represent a specific set of business realities that separate them from larger companies when looking at benefits – especially a retirement plan. For example, you most likely have smaller internal staffing, smaller budget, and less, if any, internal 401(k) expertise than larger companies.
Headstart: Four popular providers
Fortunately, there are a number of 401(k) providers that have anticipated your business realities. We recommend that you review as many providers as possible, but (helpful hint) we’ve included a short summary of the most popular 401(k) providers which are tailored to your business realities.
The ForUsAll Alt401(k) offers what no other 401(k) can, and sets you free by automating plan administration, reducing liability and workload, and offering access to cryptocurrency and expanded investment options.
- $120/month base fee
- $6/month per participant fee
We’ve made it our mission to help everyone arrive at a safe, secure retirement, whether you’re a small business owner, an employee, or self-employed. Our platform takes complexity and doubt out of retirement planning and replaces it with knowledge and clarity—so you can invest in your financial future with confidence.
Employer pricing (Max plan selection):
- $129/month base fee
- $8/month per participant fee
Human Interest makes it easy and affordable to help your employees save for retirement.
Employer pricing (Complete plan selection):
- $150/month base fee
- $6/month per participant fee
Financial wellness benefits are the new way to attract world-class talent. Empower your growing team with a healthier, happier workplace.
Employer pricing (Pro plan selection):
- $125/month base fee
- $6/month per participant fee
ForUsAll’s answers are included
You’ll notice that the worksheet comes with a column pre-filled with our answers to each question, so you’ve got one provider done already. Use the rest of the columns to flesh-out your comparison and then you’re ready to move forward in your decision making!