401(k) fees are not just a drag on the bottom line, they are a drag on your business and your employees. Yet little has been done in the 401(k) industry to lower or offset these expenses paid by businesses and employees saving for retirement around the country. The average small business pays over 2% in fees annually.
That is all changing thanks to the hard work of individuals to buck the trend. The team at ForUsAll believes that small and medium sized businesses should be able to offer the same quality 401(k) plans as giant employers, and that fees should not cripple the business in the process.
How 401(k) Fees Work
401(k) plans are very lucrative to the traditional big bank and brokerage companies that have acted as plan providers since the start of this type of retirement savings. The companies are able to get away with offering little in the terms of services while charging an arm and a leg.
The average costs to administer a 401(k) plan to a company is typically charged based on assets under management. Until a plan reaches at least $10 million in size, companies can expect to shell out more than 1% per year in costs in addition to the sometimes expensive mutual fund fees paid by employees. At around $100 million, the fees go down to 0.5%.
ForUsAll is turning that model upside down. ForUsAll charges a flat 0.52% for all plans -- whether you have $1 million, $10 million, or $100 million in the plan. For a cost comparable to plans with assets over $100 million, small businesses can offer their employees a 401(k) plan with the same, if not better, features and options.
A Modern 401(k) Plan Matters
As a technology driven company, ForUsAll gives both businesses and employees a modern, easy-to-use platform. Coupled with human advisors, the ForUsAll 401(k) offering takes the “best of both” approach to a combination of human and technology driven retirement investing.
Employers enjoy payroll integration, automated IRS nondiscrimination testing, and compliance checks handled by technology to reduce risk, lower costs, and automate the bulk of error-prone administrative tasks like correctly calculating and making employee deferrals, calculating employee eligibility, and making top heavy calculations.
Employees appreciate access to licensed human advisors. This keeps the human touch that small and medium sized plan sponsors crave, and will often keep at a high cost if the only other option is a giant, faceless jumbo plan provider. But as a small business owner, you don’t need to work with one of those faceless providers anymore. You can save money and offer your employees everything they want with a friendly, easy-to-reach support staff working behind the scenes.
ForUsAll 401(k) is modeled after features that are typically only found in large plans: 3(38) and 3(16) fiduciary, low fee funds, dedicated support team, deep institutional knowledge gained by managing over $55 billion in retirement assets, access to human licensed advisors, and full payroll integration.
Increase Participation and Employee Retention
Employee churn is an expensive, complicated problem to solve. Offering a quality benefits package helps improve employee retention and gives employees a reason to get excited about going into work each day.
ForUsAll has an impressive 89% participation rate across all participating companies. A high engagement rate like this is further evidence that ForUsAll is offering what your employees want. These plans were not put together on a whim, they are based on data, behavioral economics, and employee feedback across the entire 401(k) industry to eliminate costs and pain points experienced by both employers and employees.
Put Your Employees and Your Business on a Path to Financial Success
Losing employees costs a lot of money. A quality 401(k) plan helps your business retain employees. A ForUsAll 401(k) is affordable so you can reinvest your earnings into your business and keep profits for yourself rather than spend them training new hires or shelling out a fortune for a big box 401(k) offering.
Americans are on their own for most of their retirement needs and savings, and a 401(k) plan offers employees a tax advantaged opportunity to save for their future. The industry average shows a 5%-6% savings rate, which is even lower for younger age groups. ForUsAll participants enjoy an average 7.4% savings rate, putting them on a path to a much more comfortable future.
If you run a small or medium sized business and were putting off a 401(k) plan for your employees, it has never been easier. Check out ForUsAll today!