401GO is a custom-built 401(k) platform. We are focused on automation and technology to make it easier and much more affordable for companies to sponsor a 401(k) plan. We help with the annual administration, which includes all required notifications to both employees participating and employers sponsoring the 401(k) plan, as well as authorizing distributions and loans, and the required tax filing (Form 5500). We also have a separate investment fiduciary that reviews and monitors investments within the 401(k) plan. We are full-service and we make it easy!
We want a 401(k) plan to be available to all businesses regardless of size, and so we have modeled our costs accordingly. We have an employer monthly fee of $9 per participating employee in the 401(k) Plan. There are no setup, document, administration, or filing fees in addition to that.
For example, if you have 10 employees and 6 of those employees have a balance and/or are contributing, the employer would pay $54 a month for the 401(k) plan and $648 a year.
*Keep in mind with the new SECURE Act law you can claim a 50% tax credit for three years on those costs related to your 401(k) Plan. That would put the annual costs with the above example to $324.
We’ve timed it, and there have been some that have signed up in 6 minutes. We don’t expect that to be the case nor do we want everyone to fly through setup. It’s important to take your time and review the information. Setup is easy and you could be set up in minutes, but we allow you to leave and come back to the setup at your leisure.
For comparison, a new 401(k) Plan with a traditional 401(k) platform takes about 8 weeks for setup (6 weeks if they’re pushing it).
A 401(k) through a traditional service provider is full of manual processes that typically take up more time than you’d like, but more importantly the costs related to those processes ultimately will be passed on to you. A 401(k) plan with 401GO is centered on automation and technology to make all those manual processes a thing of the past.
You don’t have to pay anything more to have a lot of the features that are “add-ons” elsewhere. Things such as eligibility tracking, payroll notifications, compliance reviews, and annual requirements managed for you are just a few things that make the value of 401GO much higher than those other guys.
A 401(k) plan requires payroll submissions every pay period. It’s what makes a 401(k) a 401(k). We’ve made this incredibly easy to do. In fact if you have less than 10 employees this shouldn’t take more than a few minutes; however, we do integrate with most payroll providers. This can either be a full integration (360), partial (180), or a file integration.
Either way, we love to go through this process with you at the pace that’s comfortable for you.
We have put together a number of ideal plan design options for a small business 401(k) plan. Mostly, we know what requirements the IRS has established around what’s allowed and what isn’t. So, instead of you guessing on what works for you, we help you through this in the setup by asking questions that guide you to a plan design that works best for your business.
We offer all the Safe Harbor plan designs (Basic, Enhanced, Auto-Enrollment (QACA), and Non-Elective). In addition to the option to do a profit-sharing contribution or additional employer contributions at the end of the year.
401GO does the record-keeping and administration for your 401(k) account, but is not the custodian. All 401(k) contributions are held with Broadridge Matrix Trust Company (Matrix). Matrix holds the funds that are then invested into the market. 401GO directs these trades through its platform.
For reference, Matrix handles trillions of dollars in transactions a day. Let’s just say it’s safe to say that your funds are safe. Also, just for reference, 401(k) accounts are some of the most secure accounts you can have. There’s a lot of security that goes on behind these, but as they are meant for when you retire there shouldn’t be the same frequency of withdrawals from your account as would take place in a bank account.
401GO utilizes a 100% online RIA called GO Invest to help with the investment selections in the 401(k) plan. This makes the process easy and helpful for those employees participating as they would only need to answer a number of questions to help set up their investment allocations. This is done through a risk profiling tool and Robo-Adviser to make sure that investments in your portfolio meet your tolerance level for risk.
You don’t have to accept what the Robo-Adviser provides you, but it is certainly helpful to understand what type of investments match up with your age, time of retirement, and tolerance level for risk.
There are a number of differences between an Individual Retirement Account (IRA) and a 401(k) plan. The biggest one is who can have a 401(k) plan and who can have an IRA. Only a business can “sponsor” a 401(k) plan, while an IRA is available without any sponsorship. The other major difference is the contribution amounts. An IRA only allows contributions up to $5,000 a year ($1,000 if you are 50+ years of age), and a 401(k) plan allows participant contributions up to $19,500 ($6,500 if you are 50+ years of age) and an employer has the possibility of adding a matching contribution AND profit-sharing. In other words, it is possible (through specific calculations) to contribute up to $57,000 ($6,500 if you are 50+ years of age for $63,500) for a participant.
The benefits of a 401(k) plan also benefit an employer that puts in an employer contribution (match and/or profit-sharing). These contributions are pre-tax, which can help reduce the tax burden on a business all while benefiting employees participating.
Recently with the SECURE Act (most provisions effective 1/1/2020) a business can claim 50% or up to $5,000 in costs related to the setup of their 401(k) plan each year for three years. Also, if a business add an auto-enrollment provision there is an additional $500 tax credit each year for the business (this can be claimed each year).
A 401(k) plan must have a IRS-approved plan document along with a fiduciary/trustee named in that document. Luckily for you 401GO helps get that whole thing set up for you easily without you having to worry about all the specifics. No really, if you have questions we can simplify this whole thing for you.
So, quick summary, a 401(k) plan can only be offered through a business and an IRA for an individual. 401(k) plan is good for a business and employees. An individual without a business or employed by a business that sponsors a 401(k) plan would be able to have an IRA and wouldn’t be able to have a 401(k) plan.
Every year your 401(k) plan requires what is called a Form 5500 filing. This filing gives general contribution information about your 401(k) plan for tax reporting purposes. At the end of the year 401GO requests you review the information it has received in regard to annual pay and hours. After you’ve confirmed this information 401GO will put together your Form 5500 filing, authorize and transmit it.
The Form 5500 is due seven months after the end of your plan year. For example, if you have a calendar year plan that goes from January 1st to December 31st, the Form 5500 would be due July 31st of the year following the end of your plan year. It is possible to extend this filing to two and half months, so October 15th would be the extended deadline.
There are required annual notices about fees in your 401(k) plan as well as other information for those participating. Under traditional 401(k) platforms there are multiple service providers that perform these tasks (and it costs you for these things), but with 401GO everything is handled in one convenient place at an even more convenient price.
The next thing that is required every year is what is referred to as “nondiscrimination” testing. These tests are needed to make sure that those employees in your business are not being unnecessarily or unfairly excluded from the benefit. Again, traditionally there is a third-party administrator that run these for you, but just like with the annual notices 401GO takes care of all of this in one convenient place. We’ll even send you a helpful reminder once it’s finished so you don’t have to wonder.
Part of what makes 401GO awesome is the administration that is provided. Along with the notices, testing, and tax filing, we also review and authorize any distribution requests that come through from participants in your 401(k) plan. This includes loans (if you decide to allow for loans in your plan).
Don’t worry, you won’t be annoyed with any emails asking for you to sign a form or authorize a request. We take care of it!
I’m sure this was not a question that was asked by a business, but we’re adding it here because it’s important. A 401(k) plan requires a fidelity bond to cover 10% of the assets.
The fidelity bond is in place to protect those participating in the 401(k) plan from fraud and/or misuse of funds. So, this is specifically to protect participants from fiduciaries that have access to the assets.
There are some exceptions to getting a fidelity bond, one of which is if there are no employees other than you and a spouse.
The best part of this is that 401GO takes care of securing a fidelity bond for your 401(k) plan. Rest assured that you don’t have to work through any of that on your own. Again, we make it easy!
We thought you would never ask! If you scroll to the bottom of this page there is a button you can click to go through the plan setup for your business. If you want to email or call for help with this process, that is also included below. If you want to consult with us but are really busy, you can also schedule a time below.
These are the easy questions! Keep them coming! There is a link below to request to be a partner with us. We will connect with you to talk and get to know each other better and go through how everything works. We’re personable like that! You can always schedule some time to go through this as well. Either way, we are happy to talk about how amazing 401GO is, and would love to take the time to talk with you and your business!