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How many employees do you have?Just me and/or my business partner/spouse
The employer, also known as the 401k plan sponsor, appoints an authorized administrator to:
Help create the 401k plan
Ensure that the program meets government regulation
Manage the day-to-day responsibilities
A plan administrator can be a fiduciary, a financial broker, the employer, a third-party administrator, a committee, or a group of trustees working for the company put in charge of decision-making.
A plan administrator is a recordkeeper who generally:
In-house administration is a lot of work, which is why many employers outsource the administration of their 401k plans.
Brokers who do administration often charge high fees for their services. Bundled providers offer easy options, but charge hefty rates to modify plans or may be unable to accommodate changes. Dedicated third-party providers offer the most flexibility in plan design and implementation.
Plan administrators may charge clients a fee based on a percentage of Assets Under Management, a Per-Participant fee, a flat, monthly fee, a per-transaction service charge, or any combination of these.
The lowest cost plan administrators, like Ubiquity, only charge a flat monthly rate. Paying for administration can often help employers save costs by avoiding legal challenges and maximizing all tax benefits.
The authorized plan administrator must sign off on Form 5500, so for ERISA purposes, you will have to know who your 401k plan administrator is. With multiple people involved in the program’s day-to-day operations, it can be confusing to know who does what. However, your Summary Plan Description should clearly list who the administrator is.
If you have any questions about what an authorized plan administrator does, or have other questions about small business 401k plans, contact Ubiquity to learn more.
If you are a small business owner and need a retirement plan for yourself and your company, only Ubiquity offers flat-fee plans, plus expert guidance along the way.
We will fully customize your plan to meet the specific needs of your small business.
Setting up a 401k can be complicated. Only Ubiquity gives small business owners access to retirement experts in addition to industry-leading low flat-fees. Each sales expert has over a decade of experience assisting business owners in 401k plan design. Take advantage of this free benefit.