So you’re ready to offer a 401(k) plan to the employees at your small business. But where do you go from here? With so many small business 401(k) options available, it can feel overwhelming when it comes to actually picking one to meet your small business’s unique needs.

Here’s how to take the guesswork out of getting a plan that works for your small business, your employees, and you.

6 Steps to Create a 401(k) Plan That’s Right for You

Some of these steps may be simple, and some may feel like they’re easier said than done, but these are foolproof ways you can take to create a 401(k) plan that meets your small business’s (and employee’s) needs.

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Step 1: Determine Your Small Business’s Goals

The first step in creating a 401(k) plan is to identify both short and long term goals you have for your small business. Some questions to consider include:

  • Will my staff be growing (or shrinking) in the coming year?
  • What is my budget for offering a 401(k) plan?
  • What are my goals for offering a 401(k) plan (e.g., attract and retain top talent, demonstrate a commitment to employee financial well-being)?

Step 2: Select a Plan Provider

Selecting a 401(k) plan provider can seem daunting when you’re busy and there are so many providers out there to choose from. Doing your homework on them and matching their offerings with your goals can help streamline your choices quickly. Some factors to consider when selecting a provider include:

  • The provider’s fees and costs
  • The provider’s investment options
  • The provider’s level of customer service and support
  • The product’s ease of use

Step 3: Choose Your Plan

After you’ve chosen a plan provider, the next step is to choose your 401(k) plan. This includes deciding on:

  • Type of 401(k) plan you will offer
  • Plan administration and compliance
  • Match (if any) you’ll be offering
  • Contribution options for your employees
  • Vesting schedule (if any)
  • Investment options
  • Eligibility requirements

(Psst! If some of these terms are unfamiliar to you, check out our glossary, which we created for small business owners and plan participants – or anyone who doesn’t have a Ph.D. in retirement lingo!)

Step 4: Communicate the 401(k) Plan to Employees

Once you have chosen your 401(k) plan, it’s important to communicate the plan to your employees and get them enrolled. This includes providing information on:

  • The plan’s features and benefits
  • How to enroll
  • Who’s eligible to participate in the plan
  • How much you’ll be matching
  • The vesting schedule, if any
  • How to change contribution amounts or investment options
  • How to access and manage their 401(k) account
  • The plan’s rules and regulations, including any fees and penalties for early withdrawals

It’s important to ensure that your employees understand the benefits of the plan and how to participate. This will help your small business’s employees make informed decisions about their retirement savings.

Plus, it’s been shown again and again that employees who are engaged in saving for their future are more engaged in their jobs. Get your employees excited about retirement saving (because what could be more exciting than that?) and you’ll have a workforce that’s more present – and likely more productive.

Be sure you’re also pointing them to resources like paycheck calculators so they can see in real-time how making contributions to a 401(k) will impact their take-home pay.

Step 5: Monitor and Evaluate the 401(k) Plan

After implementing your 401(k) plan, it’s important to monitor and evaluate the plan regularly to ensure it continues to meet your small business’s goals and your employees’ needs. This includes:

  • Reviewing the plan’s fees and costs
  • Evaluating the plan’s investment performance
  • Reviewing the plan’s compliance with regulations
  • Gathering employee feedback on the plan’s features and benefits

Step 6: Make Adjustments as Needed

Based on your monitoring and evaluation, you may need to make adjustments to your 401(k) plan over time. This could include:

  • Changing investment options
  • Adjusting contribution options
  • Updating plan administration and compliance
  • Changing plan providers if necessary


Ubiquity is not a registered investment advisor, and the information provided herein should not be considered legal or tax advice. We recommend consulting with your financial planner, attorney, and/or tax advisor for personalized advice.

Take the next step – Let me help you.

Contact Jay Jacob, Sr. Retirement Plan Consultant

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© 2023 Ubiquity Retirement + Savings
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Do not sell my info
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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