How Important is it to Have an Online 401(k) Provider?
Dylan Telerski / 30 Mar 2020 / 401(k) Plan Information
An online 401(k) offers small businesses many advantages, including payroll integration, lower plan sponsor costs, lower employee costs, and easier employee onboarding. Your small business and employees may both benefit by switching from your traditional 401(k) to a more flexible 401(k) offered by an online provider like Ubiquity. Continue reading to learn about all the benefits of a technology-driven retirement plan for your company.
Online 401(k) Provider Benefits from an Employer Perspective
If you’ve considered switching out of a traditional 401(k), here are a few compelling reasons to go online:
Payroll integration: Traditional 401(k)s rely upon a person within the company to manually manage important aspects of the plan. This work can be tedious, time-consuming, and fraught with errors. The 401(k) business process is highly regulated by the Department of Labor and the IRS, so mistakes are not only a pain to fix, but they are also expensive.
Manual headaches cited by HR professionals when running payroll include:
- Uploading files to the 401(k) recordkeeping system
- Calculating new employee eligibility
- Adding new employees to the defined contribution plan (which is a big issue for fast-growing programs)
- Updating 401(k) deferral rates each time employees make a change
- Calculating employee matches, vesting, etc.
By contrast, you can work with an online 401(k) provider with the capability of sharing data with your cloud-based payroll system. Someone in your company can still oversee the critical aspects of your plan, but your payroll and HR teams no longer need to cope with all of the manual tasks.
Low fees: The retirement industry is notorious for excessive fees — especially when it comes to plans from legacy financial institutions. Traditional 401(k) programs were written for huge corporations and are priced accordingly. Today, online providers such as Ubiquity focus exclusively on smaller businesses and offer low-cost plans with transparent fee structures.
Fiduciary coverage: By law, a 401(k) fiduciary ensures that all employees have access to a well-managed defined contribution plan. Large companies source 401(k) management to HR and benefits professionals, but most small businesses don’t have that sort of luxury. Often, the fiduciary responsibilities are added to the business owner, CFO, or HR head’s already-full plate. As an online 401(k) provider, Ubiquity offers 401(k) products that come with fiduciary coverage.
Let your provider absorb that responsibility, place your full focus on growing your business.
Online 401(k) Provider Benefits from an Employee Perspective
Online 401(k) providers understand how to meet the challenges and expectations of the modern era by offering:
Convenient, transparent plans: Online plans are easier and more convenient for employees to evaluate. Through Ubiquity’s many educational articles, employees can learn more about saving for retirement. We speak your employee’s language to help them make clear choices about how they’ll save for the future.
Fast enrollment: Enrollment procedures are boring at best and intimidating at worst. Completing paperwork and selecting investments pose hurdles to maximizing retirement savings. Instead, employees can effortlessly auto-enroll with Ubiquity in minutes at no extra cost. Studies show auto-enrollment can boost participation rates by 82 to 96 percent.
Digital platforms: After employers set up the plans, employees can review their accounts online or through mobile apps. Features like rebalancing or contribution changing are made accessible to all through a user-friendly dashboard.
Financial wellness tools: Ubiquity customers have access to Edukate’s complete arsenal of online financial wellness tools. These engaging benefits platforms empower employees with personalized financial guides, games, tools, and features that boost plan participation rates, as well as individual retirement savings.
Support: We support employees to work with brokers of their choice to build robust portfolios. They will have full access to a broad spectrum of investment choices, including mutual funds, managed accounts, annuities, and employer stock. Whether employees are looking to hand-pick investments from over 20,000 mutual funds and ETFs, or select a variety of turnkey investment lineups, Ubiquity offers the freedom of choice.
Communication: While some online providers only offer a chat line of dialogue, employees are welcome to call Ubiquity directly, toll-free, to have their most pressing questions answered by a live person. Though plan participants can also find most, if not all, of what they need through our online portals, we value personalized customer service equally.
Low fees: Not only are fees lower for employers, but participant fees are often lower than with traditional 401(k) plans. Unlike certain competitors, Ubiquity does not charge any fees for Assets Under Management.
Saving For Retirement Has Never Been So Easy For Employers and Employees
Social Security was once seen as a crucial safety net that allowed workers to enjoy their golden years. Today’s workforce, however, has bigger plans. Nearly a quarter of one’s life is spent in retirement. Shouldn’t these years be free from financial worry? Let Ubiquity light the way toward a path of prosperity so that you can fully enjoy it.
The good news is that most retirement fund shortfalls are driven by poor planning and misinformation. While traditional 401(k)s were confusing for small businesses to set up and administer and even more puzzling, for employees to enroll in and manage, the growing pool of affordable, flexible online 401(k) providers deliver a much-needed solution for all. The online 401(k) provider reduces the complexity of retirement planning to help companies offer a technology-driven benefit that is surprisingly simple to maintain.