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Small Businesses: Look for These 6 Features in a 401(k)



After five years of experience leading a TPA call center in North Carolina, Andrew decided to move west to explore parts unknown and follow his passion of helping others. Walking through the doors of Ubiquity Retirement + Savings, formerly The Online 401(k) for the first time, he knew he’d found something special. Continuing to delight clients and partners alike and 10 years later, Andrew has been able to develop new teams, co-found a non-profit of strategic alliances, co-produce a hard-hitting documentary about the looming retirement crisis, and still had time to spread the savings gospel far and wide. Using social media and actual media alike (Wall Street Journal, Fox Business, PlanSponsor, and more), you’ll find no one who likes talking retirement more than this guy!


March 30, 2016 at 10:44 am
Personal Finance


You’ve decided to take the leap and shop around for a 401(k) plan for your small business. We applaud you for taking an important step toward solving the looming retirement crisis for the people who matter most – your employees!

As a small business owner, you wear many hats, and shopping around for the right benefits plan can seem like just another task. However, it’s important to remember why you’re looking to implement a 401(k) plan in the first place. Maybe you want to look after your employees and help them grow their nest eggs? Maybe it’s so your business can attract and retain top talent?

Regardless of your overarching goal, doing your research is key to finding the plan and provider that best suit your needs as a small business. There are several key features that business owners should investigate when shopping for a 401(k) plan.

1. Appropriate Cost

Find a plan that fits your budget. But remember, just because it’s a lower cost provider, doesn’t mean it’s the best choice for your business.

Complicated plans typically cost more, but small businesses don’t usually need those extra bells and whistles that come with larger companies’ 401(k) plans. It all comes down to how engaged you want to be with your plan.

When comparing prices, make sure you consider administrative, investment and upkeep fees, which can drive up the total cost of your plan.

2. Flexibility of Investments

Depending on the size of your organization, employees may have varying levels of investment savviness. Most 401(k) plans come with a basic fund list you can choose from if you don’t consider yourself the next Warren Buffet.

If you’re comfortable with finance and prefer flexible investment choices, ask your 401(k) provider if they have the ability to open a brokerage account. That way, you have the opportunity to invest in all the funds the custodian has to offer. The cost of opening a brokerage account varies, however, so tread carefully.

3. Accessibility of an Advisor

Often, financial advisors come with your plan; however, their purpose may only be to sell the plan and not to offer support and advice. Determining if your plan does or doesn’t come with an advisor, what their role is and whether you need them can help cut unnecessary costs.

4. Adaptable Plan Design

Make sure you choose a plan designed with businesses like yours in mind!

When considering a 401(k) plan, take a look at the eligibility options. Who amongst your employees will be allowed to participate and when are they able to start contributing? Retirement plans are not always one-size-fits-all, especially when it comes to small businesses, so having the ability to customize your plan based on your needs and the needs of your savers is key.

5. Fiduciary Responsibility

The term fiduciary is tossed around quite a bit these days. To clear up any confusion, a fiduciary is someone who is responsible for acting in good faith when managing someone else’s assets. If your 401(k) plan does not include a financial advisor, you as the company owner will take the full responsibility.

If this responsibility is something you’re uncomfortable with, you have the option to hire a financial advisor or find a plan provider who can handle the fiduciary responsibility for you.

6. Plan Support

When your employees have questions about their 401(k) plan, make sure they have somewhere to turn. Find a provider that offers some support for your employees, whether that’s a call center, online customer service chat or educational meetings.

Though shopping for a 401(k) that satisfies your small business can be overwhelming, it’s important to tune out the noise and focus on these six features. Doing so will ensure your employees have a plan that allows them to set sail on the path to successful savings. Have questions about these features? Feel free to tweet them to me @coolest401kguy!