6 Reasons to Switch Your Retirement Plan Provider

Author: / 4 Dec 2022 / 401(k) Plan Information

Young woman reviewing financial statements.

Thinking about switching your retirement plan provider? How do you know if it’s time to go with another company? Perhaps employees voice concerns about the provider. Maybe you are doing more of the work on the retirement plan than anticipated. Changing providers can take time, but it is worth it in the long run for your company and your employees if your current provider just isn’t meeting your needs.

There are several different types of 401(k) plans available. When comparing potential providers, make sure you are comparing apples to apples.

Here are some of the major reasons to consider switching:

1. Your State Plan Isn’t Cutting It

If you live in a state that has a retirement plan mandate for small businesses, you may have opted into the basic plan offered by your state. But most of these plans are just a cookie-cutter IRA with limited savings opportunities for participants and zero tax credits for employers. If you want to save up to three times more per year than you can with an IRA or are looking for a plan whose government tax credits cover the cost of setup and administration, investigate a Ubiquity 401(k):

  • Ubiquity 401(k) 100% complies with every state’s mandated requirements
  • Ubiquity 401(k) saves you more in personal and business taxes than any state plan while lowering taxable income
  • Ubiquity 401(k)s plug-n-play payroll integration saves time and prevents stress by integrating payroll and automating plan administration
  • Only Ubiquity 401(k) plan offers flat fees, not a fee that increases as your retirement balance grows
  • Ubiquity 401(k) is not tied to the state mandate but does comply with it.  Protect your retirement money by choosing a private option the state cannot touch to pay off special interests

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2. Cost Savings

When comparing 401(k)s for your small business, how much you’ll be paying is, of course, a top consideration. Plan fees reduce your employees’ investment returns. The latter is unpredictable, but the former is not.

How do the fees you are currently paying compare to other providers? Are your current provider’s fees transparent, or do sneaky fees appear? Without fee transparency, determining just how much you’ll pay in fees becomes difficult. No one wants to pay unexpected fees, and they shouldn’t have to.

3. Support

A small business needs more support from its 401(k) provider than larger businesses, but such support is often inadequate. Is your 401(k) provider giving you the service and support level you need?

Running your business is your top priority, not performing 401(k) fiduciary obligations. Your 401(k) provider cannot reduce all your fiduciary duties but can help reduce the amount of time you are involved by making certain decisions.

Have you experienced snags with your provider regarding compliance issues? Have there been delays in timely reporting? Are your company’s needs being met regarding nondiscrimination testing and IRS reporting? If you find your 401(k) provider’s support insufficient or not timely, look into switching providers.

4. Lack of Payroll Integration

Connecting your 401(k) to your payroll avoids many of the errors that can occur when payroll and retirement plans are not integrated. The recordkeeping involved with payroll integration reduces the plan’s administrative load and aids in report generation. In turn, this integration assists you in meeting the plan’s fiduciary requirements.

5. Investment Options and Performance

When it comes to retirement plans for your small business, investment options and performance play a critical role. If your current 401(k) provider’s investment options consist primarily – or solely – of target-date mutual funds, your employees deserve more.

What about investment performance? Market fluctuations are part of investing, but if your 401(k) provider’s returns lag competitors year after year, your employees deserve better. Keep in mind that mutual fund fees are costlier than alternatives such as exchange-traded funds (ETFs).

Does your plan offer brokerage accounts so employees can choose from a full range of investment options?

6. Employee Engagement

How many of your employees participate in your 401(k) plan? Do you feel the percentage isn’t high enough? After all, a 401(k) plan is the largest source of retirement income for most people.

A 401(k) provider is supposed to educate employees and help them enroll in the plan. Does your current provider offer resources to educate employees about the benefits of participating, investment types and objectives, budgeting, and other basics, or are your employees mostly left to figure things out on their own?

Employees depend on their 401(k) provider to help them understand how their 401(k) works and all about its benefits. Are they confident or concerned about reaching retirement goals? Do they like their investment choices? Do they understand employer matches or profit sharing?

If your employees are satisfied with your 401(k) provider’s services, maybe you don’t need to switch. If your employees aren’t satisfied, find a 401(k) provider that will boost participation and increase employee engagement.

Here’s a tip: A low 401(k) utilization rate usually indicates that employees aren’t happy with their plan, don’t understand it, or find accessing plan information daunting. You can do better.

The Bottom Line

The right 401(k) plan does more than help employees save for retirement. For your small business, the right plan helps to attract and retain employees. Review your 401(k) plan annually. If your provider isn’t meeting your business’ needs, switching is a wise decision.

If you’re thinking about switching your 401(k) provider, contact the financial advisors for small business at Ubiquity.


Flat fees are charged by Decimal, Inc. for recordkeeping and administrative services. Third-party service providers may assess asset-based fees to customers. Plan Sponsors are advised to review all service agreements with providers (e.g., investment advisors, custodians, broker-dealers) to evaluate total plan costs.

Take the next step – Let me help you.

Contact Jay Jacob, Sr. Retirement Plan Consultant

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44 Montgomery Street, Suite 300
San Francisco, CA 94104
Support: 855.401.4357

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© 2023 Ubiquity Retirement + Savings
Privacy Policy
Do not sell my info
44 Montgomery Street, Suite 300
San Francisco, CA 94104
Support: 855.401.4357

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