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Best Business Employee Retirement Plans of 2024

Enhance your benefits package and invest in your employees' future with retirement plans from leading providers like Human Interest.

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Written by: Kimberlee Leonard, Senior AnalystUpdated Jul 19, 2024
Chad Brooks,Managing Editor
Business.com earns commissions from some listed providers. Editorial Guidelines.

Choosing the best employee retirement plan as part of your wider staff benefits package can be very time-consuming. Distinguishing between what’s on offer is difficult because of the complexity of many providers’ plans. But it’s essential you get the decision right so you give your firm the best chance of competing effectively for top employees. To help you select the best options, we’ve researched setup costs, prices for employers, plan types, investment fees and more to determine the best employee retirement plan providers for small business owners. Read on to learn about our recommendations and why we selected them.

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Human Interest
Best for Affordability
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  • 401(k), 403(b), IRA
  • From $120/m + $5 per participant
  • 5% investment fee
Paychex Retirement Services
Best All-in-One Solution
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Links to Paychex Retirement Services
  • 3 401(k) plan types + SIMPLE IRA
  • Plan fees on application
  • Investment fees on application
ADP
Best for Small Businesses
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  • Traditional 401(k) only
  • Plan fees on application
  • Up to 1% (min $20.83) monthly fee
USA 401k
Best for Cost Transparency
USA 401k logo
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  • Traditional 401(k) + Safe Harbor 401(k)
  • $500 admin + $20 per participant
  • Investment fees less than 1%
ShareBuilder 401k
Best for Do-It-Yourself Solution
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  • Multiple 401(k) plans
  • From $95pm (employee fees POA)
  • Investment fees less than 1%
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At business.com, we strive to provide business owners with unparalleled recommendations for the best HR software and services, along with actionable advice for navigating human resources processes, fostering a healthy company culture and improving employee engagement. We infuse our playbooks and explainers with expertise from real HR advisers, payroll consultants, retirement planners and other human resources professionals.

Across our HR reviews and product guides, every solution we recommend — whether it be a payroll platform, PEO/HRO service or employee monitoring software — is thoroughly tested, investigated and vetted independently to ensure vendor claims about products are legitimate and backed by real user experiences. As part of our commitment to fairness and accuracy, each assessment is reviewed by a top business.com editor who was not involved in the analysis process. Learn more about our editorial process.

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How We Decided

When selecting the best employee retirement plans, we looked for providers who offer a variety of plan types, from traditional and Roth 401(k)s to SIMPLE and SEP IRAs. We took into account both the cost for employers and the administration and investment fees...

MoreMore

When selecting the best employee retirement plans, we looked for providers who offer a variety of plan types, from traditional and Roth 401(k)s to SIMPLE and SEP IRAs. We took into account both the cost for employers and the administration and investment fees charged to employees. During our investigations, we also tried each vendor’s online platform used for enrolling in and managing retirement funds.

23

evaluated

10

researched

6

chosen

When selecting the best employee retirement plans, we looked for providers who offer a variety of plan types, from traditional and Roth 401(k)s to SIMPLE and SEP IRAs. We took into account both the cost for employers and the administration and investment fees charged to employees. During our investigations, we also tried each vendor’s online platform used for enrolling in and managing retirement funds.

23

evaluated

10

researched

6

chosen

Compare Our Best Picks

BDC Ribbon
Our Top Picks for 2024
Human Interest
Paychex Retirement Services
USA 401k
ShareBuilder 401k
Rating (Out of 10)9.39.39.39.29.1
Use case

Best for affordability

Best all-in-one solution

Best for small businesses

Best for cost transparency

Best do-it-yourself solution

Plan options

401(k), 403(b), IRA

Traditional 401(k), Solo 401(k), SIMPLE IRA, Employer 401(k)

Traditional 401(k), individual 401(k), SIMPLE IRA, SEP IRA, safe harbor 401(k) and Roth 401(k)

Traditional 401(k), safe harbor 401(k)

Roth 401k, Safe Harbor 401k, Traditional 401k and Solo 401k

Cost to employers

From $120 per month and $5 per participant per month

Contact for price

Contact for price

$500 company fee and $20 participant fee per annum

From $95 per month (employee fees – contact for price)

Low investment fees

Investment advisory fee of 0.50% plus an average of 0.07% in fund fees

Not disclosed

Up to 0.1% (min $20.83 pm)

0.80%

Under 1%

Online and mobile enrollment

Online only

Online only

Online only

Mobile enrollment only

Online only

Transparent pricing

Yes

No

Yes

Yes

No

Setup and administration fees

Possible one-time $499 set-up fee

Not disclosed

None

None

Not disclosed

Review Link
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Our Reviews

Editor's Rating: 9.3/10
Visit Site
Links to Human Interest

A major issue for businesses of all sizes when finding the right employee retirement plans is sticking within a reasonable budget. Sometimes, employers defer the decision to offer a plan to their staff because of the high fees charged by plan providers. Although not the cheapest on the market, the service offered by Human Interest is, all things considered, the most affordable for company owners looking for a fully comprehensive yet cost-effective retirement solution for their employees.

Starting from $120 a month plus $4 per employee, employers benefit from a wide range of services ranging from integration with multiple leading payroll providers and flexible plan creation to automated plan administration and recordkeeping. We also love the low fees for employees – they charge an asset fee of 0.06% and a monthly average fund fee of 0.006% each month. This attractive overall fee structure results in reduced costs for employers now, and larger pensions for employees in the future.

Human Interest dashboard

You can manage your employees’ retirement benefit plans directly from Human Interest’s intuitive dashboard. (Source: Human Interest)

PlanBase monthly feeFee per eligible employee per monthAdditional Features
Essentials$120$5
  • No transaction fees for employees
  • Integrates with 500+ payroll systems
  • Customizable plans (auto-enroll, safe harbor, profit-sharing)
  • Employers can access Investment fiduciary services from a Human Interest advisor
Complete$160$7As Essentials plus:
  • Form 5500 filing with IRS
  • 3(16) administrative fiduciary services
  • ERISA bond procurement
Concierge$200$9As Complete plus: 
  • Continuous compliance monitoring
  • Employee mail notice management
  • Assistance with tax credit applications
  • Coverage for DOL audit expenses up to $50,000
  • Dedicated account manager
  • Direct collaboration with your CPA/auditor

Fees to your employees are 0.06% monthly asset fee cost (including advisory and recordkeeping fees) and 0.006% monthly average fund fees. You may be charged a one-time set-up fee of $499.

  • There are cheaper providers, but the bundle of services employers and employees receive for a low monthly fee is market-leading.
  • Human Interest connects to over 500 leading payroll providers, meaning you’re unlikely to need to switch to a new provider if you sign up.
  • Each plan offers automated portfolio management as well as access to a financial advisor who can give personalized investment advice for your employees.
  • Solo 401(k) plans are not available - this could be a problem for self-employed individuals wanting to use the service to maximize their retirement savings.
  • Access to a dedicated account manager is only available to higher tier subscribers - this could be an issue for business owners who need guidance with managing their plan.
  • There is a $499 account sign-up fee which, compared to other providers, is expensive. However, they may waive this upon request.

Human Interest’s clients rate its services highly online with the company scoring 7.7 out of 10 from over 200 reviews on Trustradius. Clients particularly liked the ease of enrolling employees into the service, compliance management, and the flexibility over retirement plans highly. One reviewer remarked that Human Interest has been “seamless to use with our payroll provider, and team members are able to navigate the site with ease.”

Editor's Rating: 9.3/10
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Links to Paychex Retirement Services

Having separate vendors looking after your payroll, general employee benefits plan and your retirement program adds layers of complexity to each, often leading to errors and inefficiencies. Paychex simplifies this greatly as they can manage all of these services for your firm under one roof.

From one intuitive dashboard, you can run and sync your payroll, benefits program, and retirement plan. We appreciate how easy Paychex makes this from the start, offering you access to their dedicated support team so that they’re on hand to make sure initial implementation of their system is smooth. You can tell the platform has been built with the user experience in mind, as all functions flow logically from each other and every feature is just one or two clicks away. We also really like the integration of the financial wellness service, FinFit, which helps employees manage their own money more responsibly and plan better for retirement. The mobile app is easy to use too, and it allows business owners and employees to manage their accounts on the go.

Paychex pension details

Employees can check their 401(k) and pension provisions by logging into Paychex. (Source: Paychex)

Paychex does not publicly disclose its fees. Instead, you have to contact an advisor to arrange a tailored quote for your business.

  • You can reduce the complexity of managing payroll, benefits administration and a retirement program by outsourcing it to one partner instead of multiple providers.
  • Your employees will appreciate how the FinFit app can help them manage their money better and retire with more.
  • The service Paychex provides is flexible and lets firms customize their employee retirement plans to fit the needs of their staff.
  • The website interface is intuitive but it lacks the polish and smoothness of the dashboards provided by ShareBuilder401k and Human Interest.
  • Paychex requires you to contact one of its sales reps or affiliates to get a custom quote for their service.
  • The Better Business Bureau has awarded Paychex (the parent company) an A+. However, be aware that there have been over 170 complaints made to the bureau in the past year about the firm.

On TrustRadius, Paychex scores 6.7 out of 10. Clients love the employee self service tools, how easy the dashboard is to use and the customer support offered by the firm.

ADP logo
Editor's Rating: 9.3/10
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Many employee retirement plan providers are only interested in selling to larger clients and tailor their services and pricing structures accordingly. As a result, many SMBs owners struggle to find plans that fit within their budgetary constraints or offer the flexibility they need. ADP is a notable exception and it’s our choice as the best employee retirement service for small businesses.

We love how ADP offers such a wide range of retirement plans to employees including traditional 401(k), individual or solo 401(k), SIMPLE IRA, SEP IRA, safe harbor 401(k), and Roth 401(k). Just like with Paychex, we were impressed at how well their intuitive online platform integrates payroll and retirement plan services. The firm has clearly invested a lot of time and effort into its excellent mobile apps that make it easy for employees to enroll in the plan and manage their accounts. This simplicity could help employers to boost participation rates, a challenge for many SMBs. We should also note how ADP provides dedicated managers to assist companies with implementation and ongoing administration of the retirement plans. For SMB owners spinning many different plates and lacking  HR expertise, the support the ADP provides is excellent.

ADP 401k overview

Employees can drill down into their 401k and pensions on ADP. (Source: ADP)

ADP requires clients to get in touch with them for a tailored quote.

They offer the following three service levels on their 401k packages:

PlanNumber of employeesFeatures
ADP 401k Essential1-49
  • Simplified plan administration
  • Real-time payroll integration with ADP Smartsync®
  • 3(16) administrative fiduciary and 3(38) investment management services
  • Financial wellness tools
  • Auto-enrollment
  • Award-winning ADP Mobile App
ADP 401k Enhanced50-99As Essential plus:
  • Customizable plan design and investment options with no proprietary funds required
  • Streamlined compliance process
  • Access to an expert service team, TPAs and 3(16) fiduciary services
  • 3(21) and 3(38) investment management services available
  • Personalized insights based on extensive employee data
ADP 401k Premium100+As Enhanced plus:
  • Dedicated client service manager for to administer your plan
  • Personalized guidance from a relationship manager
  • Support for mergers, acquisitions and spin-offs with an ERISA consultant
  • Employee communication program managed by a dedicated retirement communication manager
  • Educational resources including webcasts, microsites, and videos
  • Fully integrated HCM platform
  • Specialized support for private equity firms and profit-sharing plans

ADP charges employers a monthly investment service fee of 0.10% of covered assets subject to a minimum $20.83. You may be able to offset the costs of setting up, administering and contributing to the plan but this depends on the plan you choose and the number of employees enrolled.

  • The range of retirement plans available to employees is one of the broadest for a vendor that’s focused on servicing smaller businesses.
  • For small business owners inexperienced with HR or pension plan management, having a support team available at implementation and beyond is very helpful.
  • The mobile app is particularly well executed, which may lead to much greater participation in your program.
  • ADP doesn't list prices on its website and requires that you make contact with one of their sales reps. This complicates the process of comparing and contrasting competing quotes.
  • The company receives many glowing reviews online from customers. However, the tone of the bad reviews suggests that the company sometimes poorly mishandles situations.
  • Although accredited by the Better Business Bureau to A+, there have been nearly 350 complaints about the firm in the past 12 months.

ADP scores highly on TrustRadius with a score of 7.9 out of 10 for its Workforce Now package which allows employees and employers to manage retirement plans. One reviewer commented that “adjusting retirement strategies is simple and easy” while another noted that their firm now uses “ADP Workforce Now from recruiting to retirement”

USA 401k logo
Editor's Rating: 9.2/10
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We love that USA 401k provides clear pricing information to potential customers upfront, saving them the time they’d otherwise spend gathering quotes.  USA 401k make its fee structure as flat and predictable as possible. For example, unlike many other providers we researched, the USA 401k does not charge 12b-1, exchange or minimum-balance fees. With both its new and existing 401k plan, employers pay an annual fee of $500 plus $20 per participant – employees pay just 0.8% a year. We love how no matter how small the total of your employee’s investment, they get access to 15,000 funds and 1,000 exchange-traded funds. We also appreciate the concierge-level service given to employers when they set up their service, with help even extending to payroll integration and assistance with reporting and compliance.

USA 401k offers one service plan, priced at $500 per year for your company and $20 per year per program participant. Its services are aimed at companies with less than 1,000 employees.

For that, you receive:

  • Payroll integration and contribution processing
  • Loans, participant tax, rollovers, distributions and hardship withdrawals reporting
  • Profit sharing
  • Concierge-style support from implementation and beyond
  • DOL compliance, tax reporting and year-end testing

Employees benefit from enrollment support (including on-site seminars and mobile enrollment), personalized assistance and access to a range of resources and tools including retirement income calculators and reports from Morningstar.

  • We really like how transparent USA 401k is in its pricing and the comprehensive range of services and support you’re provided with.
  • The investment and risk appetite requirements of all participants is very well covered through access to more than 15,000 mutual funds and ETFs.
  • There is no tiering of services - smaller employers don’t have to pay extra to access additional features.
  • There is no online registration to set up a plan. You have to contact the company or one of its authorized advisory services or agents to get started.
  • Employees can choose from a variety of pre-selected investment options in their 401k plan, such as mutual funds and ETFs. However, they cannot change the underlying details or structure of those chosen investment options.
  • We like that employees can enroll via their mobile phone, however we were disappointed that there is no mobile app that employers and participants can keep track of their plans with.
Editor's Rating: 9.1/10

Many business owners just want to be able to quickly and easily set up a retirement plan for their employees themselves. They don’t necessarily want to speak with an investment advisor, but want an automated process that offers compliance and value-for-money. If this is what you’re looking for, the best-executed do-it-yourself solution we reviewed is Sharebuilder 401k.

The company has digitized every step of setting up a new plan and has automated all associated paperwork and administration. When set up, employees can choose from an impressive range of 22 index funds and six model portfolios to emulate. We love how the platform makes it easy for employees to manage their plan and check on their savings at any time. The ShareBuilder 401k business model also keeps costs down and, as you can see from their fees below, they pass these savings onto their customers.

Sharebuilder 401k offers the following three subscription levels:

Plan TypeMonthly CostKey Features
Secure Haven 401(k)From $95
  • Instant vesting
  • Obligatory match, ensuring IRS compliance
  • Profit sharing available
Classic 401(k)From $110Everything in Secure Haven 401(k) plus:
  • Flexible matching options, including vesting schedules
Graduated Profit-Sharing 401(k)From $190Everything in Classic 401(k) plus:
  • Combinable with Secure Haven or Classic matching
  • Customizable profit sharing for employees

Every service plan has the following features:

  • Automated onboarding with pre-selected investment allocation
  • Comprehensive investment oversight, including ERISA 3(38) coverage
  • Diverse investments to choose from: 22 index funds, 1 money market, and 6 model portfolios
  • Choice between Roth 401(k) and traditional tax-deferred contributions
  • Automatic price discounts
  • Comprehensive educational materials: webinars, guides, videos, and calculators
  • Form 5500 prepared for easy completion
  • Loan and hardship withdrawal options for participants
  • Dedicated 401(k) advisors and customer support
  • Plan compliance
  • Streamlined digital year-end checklist

  • The ShareBuilder 401k process for setting up an account is automated and easy to follow. This is true even for business owners with little or no HR or pension plan management experience.
  • The platform offers a wide range of investment options and account types, and promises never to charge 1% or more in investment fees.
  • If your company’s pension assets exceed $5 million, ShareBuilder 401k waives their administration fees completely.
  • The company does not offer any IRA options, which may deter individuals who want more flexible retirement savings options.
  • The website only lists starting prices, so hard to know what your true cost will be.
  • Unlike most other providers, the company does not offer a mobile app.

What is an Employee Retirement Plan?

An employee retirement plan is a benefit that provides employees with a vehicle for saving for their retirement. Most employee retirement plans also include employer matching contributions, which offer additional payments into the fund up to a certain percentage of employee contributions.

How Do Retirement Plans Work?

There are several different types of employee retirement plans to choose from, but they generally involve an employee contributing a percentage of their income every paycheck. These contributions are usually invested and grow tax free on the market. In some cases, like with 401(k) funds, employees cannot withdraw funds prior to retirement age without incurring a penalty and paying taxes on their withdrawals.

Most retirement plans include employer matching contributions, which can boost an employee’s investment potential. For example, employers may offer a dollar-for-dollar match up to 3% of contributions to an employee’s retirement fund. In that case, if an employee’s paycheck is $1,000 and they contribute 5% of that paycheck ($50), the employer would match the first 3% of that payment for a total of $30 in matching funds.

Different types of retirement plans have their own rules, especially around how withdrawals are taxed. We’ll explore some of the most common types of retirement plans further below.

Are There Different Types of Employee Retirement Plans?

There are several types of 401(k) and IRA employee retirement plans that you can sponsor for your small business. Your accountant or tax advisor can help you decide which is the best option for your small business, based on your financial situation, number of employees and personal retirement goals.

401(k) Plans

This is the most popular type of employee retirement plan because it has higher contribution limits for employees and offers a choice of pretax or Roth contributions. Plan varieties include traditional 401(k), safe harbor 401(k) and individual 401(k).

IRA Plans

These plans usually have lower contribution limits than 401(k) plans but are also easier and less expensive to set up and maintain. Most brokerages offer both employer-sponsored IRAs and personal IRAs that can supplement workplace-sponsored retirement plans. Plan varieties include traditional and Roth IRAs, SIMPLE IRAs and SEP IRAs.

Bottom LineBottom line
For small business owners, 401(k) plans and IRAs are two popular choices. A 401(k) plan is best suited for a business owner who wants to max out their contributions, while IRAs are less complicated and easier to start.

What Are the Benefits of Offering a Retirement Plan?

Offering employee retirement plans can have significant benefits for a business, including the following.

Improved recruitment and retention

Employers who offer employee retirement plans generally have an easier time recruiting and retaining top talent. One study performed by international insurance advisory WTW suggests that 60% of workers consider their current retirement benefits plan an important reason they remain in their current role. That makes employee retirement plans an important part of attracting job candidates for open positions, as well as avoiding expensive employee turnover costs by keeping your existing team satisfied.

Improved employee morale

Offering employee retirement benefits can also keep your team engaged by boosting morale. An estimated 87% of people value employee retirement benefits, making them an important element of employee compensation. Employees with high morale who feel engaged are estimated to be 21% more productive than employees who aren’t — so offering employee retirement benefits may even pay off in the form of harder workers who get more done.

Reduced tax burden for employers and employees

Employee retirement benefits can reduce both your tax burden and your employees’. Employer matching contributions that are paid as part of your employee retirement plan can potentially lower company taxable income. Similarly, employee contributions to their plans reduce their taxable income as well, saving everyone money during tax season.

How Much Do Employee Retirement Plans Cost?

When you’re evaluating how much an employee retirement plan costs, you need to consider two sets of prices: your costs to sponsor the plan and your employees’ costs to participate in it. These costs vary by type of plan and provider. There are also tax incentives associated with some of these plans, which can lower your overall expenditures.

Tax Advantages of Offering Employee Retirement Plans

The government offers tax incentives to small businesses that sponsor retirement plans for their employees. As you calculate what it would cost to sponsor an employee retirement plan for your business, consult your accountant or tax advisor to determine which tax credits and deductions you’re eligible for and how they would affect your tax strategy:

  • Eligible employers can claim a tax credit of up to $5,000 for three years for the costs associated with starting a SEP IRA, SIMPLE IRA or 401(k) plan. A tax credit reduces the taxes you owe on a dollar-for-dollar basis.
  • The contributions you make to your employees’ plans are tax-deductible.
  • Contributing to and participating in a retirement plan may lower your income tax bracket.

401(k) Plan Costs

A 401(k) plan used to be rare for small employers to offer, given the costs and complexity of complying with federal regulations. You needed a plan administrator, custodian, recordkeeper and financial advisor. Each of these parties charge fees; some are fixed while others are based on plan assets. Some companies offer multiple in-house services but charge extra for some of them. Sounds confusing? We think so too.

In our opinion, hiring multiple companies to handle different aspects of the same overall task is burdensome and expensive, so in our search for the best retirement companies, we looked for all-inclusive 401(k) providers that cater to small businesses. They handle all the duties of an administrator, recordkeeper, custodian and advisor, so you only need to work with one company.

They also act as an ERISA 3(38) fiduciary, which lowers your liability risks. Some of these companies use robo-advisors that rely on algorithms to manage assets, allowing them to forgo fund management or advisory fees, so you only pay the fund expense ratio. Most of these companies offer low-fee index funds, ETFs, target-date funds and mutual funds to keep expense ratios down. Here’s an overview of the fees you can expect to pay:

  • Setup or establishment fee: Most retirement plan companies charge around $500 to set up your plan, but some offer discounts or promotions that reduce or waive this fee. If you’re converting an existing plan, this fee is often higher.
  • Monthly or annual administration fee: Most retirement services charge this fee, which can run the gamut from $50 to $130 per month, sometimes even higher. Some of the vendors we reviewed charge this fee quarterly.
  • Monthly or annual cost per employee: This fee is sometimes included in the monthly administration fee. For those that charge it separately, the average price is around $6 per employee per month. Usually, the employer pays this fee, but sometimes the employee (plan participant) pays it.
  • Investment, advisory, custodian or other asset-based fees: Most companies charge some sort of asset-based fee that the plan participant pays. It ranges from fund expense ratios that cost around 0.06% to 0.1% for index-based funds to advisory services that cost up to 0.75% annually. All told, the average investment fees for 401(k) plans are around 1.65%.
  • Termination fee: Every provider charges this fee, which is usually around $1,000, if you terminate your plan, although a few companies charge less. Shutting down a plan and transferring assets is more involved on their end than setting up a plan.
  • Nonstandard or event-based fees: If plan participants take out loans from their 401(k) plans or reach the age where they’re required to take minimum distributions, they’ll pay various related fees, such as loan origination and loan maintenance fees.
  • ERISA bond (also called a fidelity bond): Small business 401(k) plan providers don’t offer this, but you’ll be required to have it when you sponsor an employee retirement plan. You should be able to get it from top liability insurance providers or your retirement services provider can recommend a source.
TipBottom line
Make sure you know all the costs of your plan before you sign on the dotted line. It can be complicated and costly to exit an employee retirement plan, so you want to make a well-informed choice.

IRA Plan Costs

Employer-sponsored IRAs are much simpler to set up and maintain than 401(k) plans, but they don’t allow employees to set aside as much money in their workplace retirement plans. IRAs have a very different pricing structure from 401(k) plans, and there’s a lot of variance between brokerages.

Here’s a sample of the fees you should look out for when setting up this type of employee retirement plan:

  • Setup fee: Most brokerages don’t charge a fee to set up an IRA retirement plan.
  • Account minimums:Some brokerages have a minimum investment threshold that you must meet to establish an account, but many don’t.
  • Account service fees: Some brokerages charge an annual fee for each fund if your balance doesn’t meet a certain threshold. Waivers may be available.
  • Investment trade fees: Plan participants pay this fee, or commission, when they trade shares. There’s a lot of variance for this fee, depending on the brokerage you use and the funds you trade. Advertised fees for ETFs that you trade online range from $4.95 to $19.95. However, if plan participants trade over the phone or have a broker place the trade for them, this fee is higher. Participants can save money on this fee by choosing from the commission-free trades that many brokerage firms offer.
  • Advisor services (optional): Brokerages frequently offer management services for an extra fee. Usually, this fee is a fraction of a percentage of the account balance, but some cost more than 1% of your assets. You may be required to meet account minimums to qualify for this service. However, most brokerages, even those that offer this service, provide complimentary access to brokers who can give your plan participants custom investment advice, helping them select funds and create a sound investment strategy.
  • Nonstandard or event-based fees: As with 401(k) plans, participants may pay various fees for actions like withdrawing or transferring money out of their retirement accounts.
FYIDid you know
When you’re shopping for an employee retirement savings plan, the more you know about the costs and features upfront, the better. That’s why we scoured the plan providers out there to find the ones that are transparent and forthcoming about the fees they charge and the services they provide.

How to Choose a Retirement Plan

Choosing the right employee retirement plan is critically important, but it can also be a complicated and difficult decision. Spend time evaluating each provider and the plans they offer, and don’t be afraid to bring in members of your team and outside professionals to support you during the selection process.

To understand the process even more, we spoke with business owners and leaders about how they went about choosing an employee retirement plan provider and the factors they prioritized along the way.

Determine whether you need a qualified or non-qualified plan

Qualified employee retirement plans refer to those qualified for special tax considerations and include familiar vehicles like 401(k)s. They are “qualified” under the Employee Retirement Income Security Act (ERISA) because they meet certain regulatory criteria.

Non-qualified plans are more flexible but do not offer the tax advantages that qualified plans do. They can be offered to a smaller group of employees and custom made to suit their needs. Qualified plans are offered to most employees in the company and come with an inflexible design.

“Identifying the purpose of the plan allows the ability to begin evaluating which type of plan is best suited for your needs,” said Adam D’Acierno, founding partner of Strategic Capital. “For example, a non-qualified plan will have different requirements for coverage and testing than a qualified plan which is more stringent in its requirements.”

Work with a reputable financial advisor

The ins and outs of employee retirement plans can be a lot to wrap your head around, so it’s wise to work with someone who understands the space already. We recommend working with a professional financial advisor who has a proven track record when it comes to managing employee retirement plans.

“The most important piece of advice I would give is to evaluate and identify an independent fiduciary advisor who can show a documented prudent process to help identify your needs, evaluate service providers, assist with implementation and ongoing monitoring of the plan is the most beneficial best practice to follow,” D’Acierno said. “They should be able to educate you at a plan level as well as the participants of the benefits involved in your company’s retirement plan.

Consider the type of plans available

There is a wide range of retirement plans to choose from, and even among certain types of plans there are variations (think traditional 401(k), individual 401(k) and safe harbor 401(k).) Spend time with a financial advisor analyzing all the types of plans and how they differ from one another. Make an educated decision based on the nuances of each plan available, and evaluate providers on whether they offer the best possible plan for your business.

“[We] recommend the company select what is called a ‘Safe Harbor’ Plan,” said Jim Cichanski, founder and chief human resources officer for Flex HR. “This is a 401K plan that contributes a certain match and will not need to do testing to ensure the highly compensated level of employees are meeting a percentage of savings of lower compensated employees. This also can save tremendous administrative time when doing the yearly audit of plans.”

Create a retirement plan advisory committee

An employee retirement plan affects the whole company, so it’s important to bring in the right voices to ensure you’re making an informed decision. D’Acierno suggested forming a retirement plan advisory committee that includes other stakeholders in the company, including employees who will invest in the plan.

“This committee normally has about three to seven members who have a level of expertise in finance, HR/payroll, or sit at executive levels,” he said. “It is important to note that the individuals responsible for making decisions for the plan are liable to the plan at a fiduciary level, so it is important for them to understand their responsibilities and for your company to provide levels of risk mitigation for those members.”

Cichanski recommended that the finance and HR departments be represented on this committee, as well as the CEO.

Thoroughly vet a provider before choosing them

Once you believe you’ve identified the right plan and right provider, put them to the test. Schedule multiple calls to ask detailed questions of company representatives, test their customer service and gather reviews from existing customers. Once you choose a provider, it’s not an easy process to switch, so do your due diligence on the front end to avoid an expensive and time-consuming hassle later.

“As you select a provider, talk to them many times and look at the customer service of that vendor. Check references out and key into the support provided by the vendor,” Cichanski said.

What are Some Features to Look for in Employee Retirement Plans?

In our search for companies with the best employee retirement plans, we knew we wanted to find providers that serve small businesses and offer quality plans that are affordable for both business owners and employees. We also wanted the plans to be easy to set up and manage. To this end, we looked for retirement services with the following features:

  • Services for small and very small businesses: Not every employee retirement plan provider works with small businesses. Some require you to have thousands or even millions of dollars in fund assets. We looked for services that work with companies that have just a few employees and don’t yet have any plan assets.
  • Fiduciary responsibility, where applicable: Small business 401(k) plans have strict federal regulations, so we looked for retirement plan companies that do the heavy lifting for you and provide plan administration, recordkeeping and advisory services as part of their offering and standard cost.
  • Pricing posted on the company’s website: This makes it easy for you to determine whether a plan is within your budget and saves you the time of calling the company for this information.
  • Competitive costs: We know that price is one of your top concerns about sponsoring a plan, so we looked for plans that have relatively low costs and few fees while still delivering a quality retirement product.
  • Patient customer service: Many small business owners haven’t been plan sponsors before, and there’s a lot to learn before offering a workplace retirement plan. For this reason, we included customer service in our testing.

What are Some Alternatives to Retirement Plans?

Four other providers you may wish to consider that scored highly with our reviewers are:

Vanguard

Vanguard offers savers access to hundreds of mutual funds and ETFs with an average fund expense ratio at Vanguard is 0.08%. This is much lower than the industry average of 0.44%. We also like that they charge no trading fees either. The funds they offer tend to perform well over time (however, bear in mind that past performance is not a guarantee of future performance). Employers can offer their staff a wide variety of retirement savings plans, including a SEP IRA, individual 401(k), small business 401(k) and SIMPLE IRA. We also like the absence of a minimum investment requirement as that lowers the barrier to entry for SMBs. Last but not least, employers will find managing their accounts easy thanks to the intuitive dashboard on Vanguard’s site.

Fidelity

Fidelity’s simple account fees for its 401(k)s and IRAs stand out from its competitors – the provider charges $500 for setting up your account and $300 per quarter thereafter. Employees pay just 0.125% on their account balance and $25 for bookkeeping each quarter. Fidelity also doesn’t charge commissions when participants buy or sell U.S. stocks, bonds, mutual funds or ETFs. If you’re self-employed, the company offers SEP IRAs meaning you have access to one of the most cost-effective ways to save for your retirement.

We love how straightforward setting up an account on Vanguard is together with the extensive knowledge base on the providers site that helps your plan’s participants understand each type of investment in greater depth so they can determine which are right for them.

Shelton

From the start, Shelton assigns you a dedicated account manager so you feel supported at all times. Importantly, the firm stays with you after the plan has been set up and your account manager is there to assist you with your questions if any issues arise. We love Shelton’s live customer support. The team is there when you need them, unlike many other providers that operate ticketing systems where you have to wait for a reply. The volume of information on the firm’s website is impressive and it will help educate both you and your staff about the world of retirement savings and planning. The firm will even come to your workplace to speak to your staff, if you think that will help improve participation rates.

Perfect 401k

What stops many SMB owners setting up a retirement plan for their staff are concerns about how long the process will take. Of all the providers we reviewed, Perfect 401k is perfect for simplifying and fast tracking the process. From the outset, a dedicated implementation team is there to simplify the process for you. They’ll help you design the plan for your company and prepare enrollment materials to distribute to your staff. We love how much control staff have over their own plans – they can choose fully-managed, guided or self-directed accounts for themselves. For those that want to take more charge of their portfolio, they can choose from up to 20 low-cost mutual funds and even open an account with the broker Charles Schwab. All together, these factors should ensure higher levels of participation in your plan across the business.

Methodology

To determine the best employee retirement plans on the market, our team of HR experts and analysts evaluated an initial list of 23 plan providers. We compared these providers based on plan availability and flexibility, estimated costs and fees, and customer support.

After narrowing our list down to 10, we scheduled demos with provider representatives and asked them detailed questions about the plans they offered. Our experts and analysts studied each vendor’s administrative platform and evaluated their retirement offerings on more than 30 factors. We ultimately chose six services as our top recommendations.

These factors were weighted differently in our overall conclusion. The weights were determined based on how much business owners prioritize these criteria when shopping for business software and services and making purchasing decisions.

  • Pricing (30%): Our experts and analysts compared and contrasted each vendor’s plans, judging which packages offered the best bang for your buck. They took into account monthly rates, per-employee fees, implementation costs, administrative charges and investment fees.
  • Features (25%): We looked for standard retirement plan features like a variety of plan types to choose from, extensive investment options, an intuitive dashboard for employer and employee administration, and advisory services. We also assessed the available integrations and awarded extra points for advanced services, like AI-powered financial planning tools.
  • Ease of Use (25%): We tested every retirement plan sponsor’s administrative software ourselves, gauging each platform’s learning curve, user-friendliness and customization options. We also considered how seamlessly the program worked with payroll software and whether there was a mobile app for retirement plan management on the go.
  • Customer Service (20%): We evaluated the range of customer service options, including whether phone assistance was provided with all package tiers. We also examined each vendor’s online resources for businesses interested in self-guided help.

Based on these criteria, we not only determined which employee retirement plan providers our readers could trust but also the ways in which each vendor could best serve different business needs. Some plan sponsors and their software were better at certain tasks than others or more suited to a particular type of company. These takeaways informed the “Best for” use cases you see on this page.

To learn more about our methodology, see our full editorial process.

FAQs

Costs depend on how many employees participate in the plan, the type of plan you choose and the retirement plan company (or companies) that help you run the plan. You should also consider whether you will match or contribute to your employees’ IRA or 401(k) accounts.

You should approach setting up a 401(k) the same way you would implement health insurance or other benefits for your employees. That means conducting research, figuring out what your employees want and making decisions based on your due diligence. Once you settle on a retirement service provider, you have to choose the plan that works for your business, budget and employees’ needs.

Armed with your research, you next have to create a plan document that meets IRS requirements and details the important aspects of the plan. You also have to choose a trustee to handle the plan’s contributions, plan investments and distributions. Under IRS rules, the plan’s assets must be held in trust to ensure funds are used to benefit plan participants and their beneficiaries. It’s also important to keep detailed records of your employees’ contributions and the current performance and value of the plan. You can outsource those tasks to a 401(k) recordkeeper if you don’t hire a provider that does it all for you.

It’s also incumbent on you as the employer to provide information about the plan to your

Self-employed individuals have several retirement plan options, including SEP IRA, Solo 401(k), SIMPLE IRA and Traditional or Roth IRAs. Each plan has different contribution limits, tax implications and setup requirements. To establish a plan, choose the type that best suits your needs, open an account with a financial institution, complete the necessary paperwork and begin making contributions. Consider factors such as ease of setup, contribution limits, and tax advantages when selecting a plan. We recommend working with a financial advisor or tax professional to determine the most appropriate option for your specific situation.

Generally, an IRA will not be sufficient to support your full retirement. IRA contribution limits are relatively low, which can restrict the amount you’re able to save. For a more secure retirement, many financial experts recommend a diversified strategy that combines multiple savings vehicles and potential income sources. Consulting with a financial advisor can help you create a comprehensive retirement plan tailored to your specific needs and goals.

Planning for retirement involves assessing your financial goals, estimating future expenses and creating a savings strategy to meet those needs. Start by determining your desired retirement age and lifestyle, then calculate how much you’ll need to save, taking inflation into account. Develop a diversified investment portfolio that balances risk and potential returns, typically including a mix of retirement accounts, stocks, bonds and other assets. We recommend working with a professional financial advisor to ensure your retirement savings remain on the right track, and that you are able to adjust your plan as needed.

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Written by: Kimberlee Leonard, Senior Analyst
Kimberlee Leonard is an insurance expert who guides business owners through the complicated world of business insurance. A former State Farm agency owner herself, Leonard started her decades-long career as a financial consultant advising on investment strategies before switching her focus to insurance and risk mitigation for businesses. At business.com, Leonard covers topics related to business insurance, such as workers' compensation rates, professional negligence, insurance riders, hold harmless agreements and more. Leonard has developed insurance primers on everything from small business insurance costs to specific policies, such as excess liability insurance. She has also reviewed business software tools, analyzed employee retirement plan providers and continues to share insights on financial topics as they relate to business. Leonard's work has been published in Forbes, U.S. News and World Report, Fortune, Newsweek and other respected outlets.
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