Business associations, chambers of commerce or any other loosely related organization of businesses can sponsor a group 401(k) plan. A high-quality and low-cost benefit can provide an attractive reason for businesses to join your organization, and to remain as members long term.
401GO offers a group 401(k) plan called Syndicate. This product comes with many attractive features for the organization, the business owner as well as the participants.
Feature 1: No Cost to the Sponsoring Organization
Most group retirement plans come with big expenses. They can cost thousands of dollars to set up and maintain. A Syndicate costs the sponsoring organization nothing, giving you a free benefit to utilize to help attract businesses to your group.
For businesses, their costs are some of the lowest in the industry. They’ll only pay a small base fee, plus a low fee per active participant (not per employee!), so they won’t pay for employees who are not using the plan. And, the pooled pricing available using a group plan means businesses can get much lower pricing through your organization than they could find anywhere on their own.
Pooled pricing is the biggest advantage for businesses to join the group plan. Taking advantage of economies of scale, employers can receive pricing as low as $4/participant.
Feature 2: Extremely Fast Setup Time
Most group plans take weeks, even months, to set up. A Syndicate can be up and running the same day.
It’s a game-changer for organizations who are anxious to get started.
Employers can set up their plans quickly too. Using our automated setup process, they can complete their onboarding process in just 15 minutes, and have a plan in place that is ready to use. Compare that to legacy providers, who often require 4-6 weeks to get a plan started.
This is particularly valuable for participants. Using our guided strategy builder, employees spend just 5 minutes answering a few questions about their time horizon and risk tolerance, and we help them build a customized portfolio that will suit their needs perfectly. They can make changes to the portfolio at any time.
Feature 3: No Fiduciary Liability
The sponsoring organization incurs no fiduciary liability or responsibility for plan management at all. 401GO provides the investment lineup, and individual businesses provide a sponsor for their plan, so that responsibility remains with the business owners, and not with the association or chamber.
While each business will need to provide a plan sponsor to carry the responsibility for their plan, most of the work is outsourced, so the only job business owners (and their admins) need to do is oversee that work is being done appropriately. This is made easy on the 401GO portal, which comes with reporting to provide awareness.
Feature 4: No Administrative Duties
All the day-to-day work of managing a group retirement plan is offloaded to 401GO. We manage the contributions and distributions, we provide employee notifications, we monitor compliance and file required reports, we provide customer support, and our partner Matrix Trust holds the plan assets.
None of this work will need to be performed by either the sponsoring organization or the individual businesses. Once setup is completed, the only work typically required of business owners is an annual review to ensure information is accurate and up to date, which takes about 10 minutes.
Feature 5: Co-Branding for Organization Recognition
A Syndicate plan comes with co-branding opportunities, so that when business owners and their employees log in to their accounts, they will see the logo of the sponsoring organization. This lends credibility to your organization, and helps remind the business owner of the valuable benefit they are receiving.
A Step Above Traditional Group Plans
If you’re researching the benefits of a group 401(k) plan for your organization, consider these important plan design features.
- Does the plan require specific design features of participating employers?
- Does the plan come with complications that cause difficulty for employers, employees or admins?
- Does the plan require employers to be connected in some way?
- Does the plan require admin work to be done by the sponsoring organization?
- Does the plan require the businesses to be a certain size?
Syndicate doesn’t. It doesn’t require specific design features, complications, business sizes or connections. And it requires no work by the sponsoring organization.
401GO aims to be your preferred partner in retirement planning. We’ve developed our platform to be automated, easy to use and smart, so that it meets the needs of every small business, their employees, and the organizations they belong to.
Talk to us today about how we can benefit your team.