The Money Mustache Community
Learning, Sharing, and Teaching => Investor Alley => Topic started by: NorCal on October 31, 2018, 09:33:06 AM
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I'm starting a new job at a tiny tiny company. I'm employee number 6, and they just started having an official payroll last year.
They don't have much in the way of benefits set up yet. The owner wants to do more, but is entirely swamped with too much business development. The owner agreed to set up a 401(k) in 2019, but I get to do the research and help choose the provider.
I know the big providers like Vangaurd, Fidelity, and Schwab typically won't touch 401(k)'s for small companies. My prior experience with small company plans was universally horrible.
Does anyone know any small-company 401(k) providers that don't suck?
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heard good things about Employee Fiduciary. Guideline has a cheap, simple plan but not a lot of flexibility. I'm sure there are many others. You should also look around for a local firm. Talk to some CPAs, any doctor or lawyer friends that have their own practices, for recommendations. Having someone you can interface closer with can be beneficial. Especially to design a plan tailored to your specific business.
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Sounds like you're going to be the 401(k) administer. Don't worry, it's not that bad. I'm also at a small company, and got to pick out the 401(k) plan, but that also meant I was in charge of running the thing. It's pretty easy.
Anyway, when I was looking a few years ago, the two top contenders were Employee Fiduciary and Vanguard (administered by Ascensus). Both of these providers offer plans that are better than probably 95%+ of 401ks out there. From what I recall, overall, factoring expense ratios as well as employers costs, Employee Fiduciary ended up being less expensive when the plan's assets under management were less than a million, while Vanguard was less once assets exceeded a million.
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Thanks for the input. I will check out Employee Fiduciary and Ascensus.
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When my company was small we used Vanguard through Ascensus. It's worked pretty well.
This was much better than the default option we had through the PEO we were using for payroll and other HR functions.
Their default was some insurance company which had a bunch of high fee funds plus annual fee per employee and even an advisory fee. For nothing.
The Vanguard option costs the company a few thousand per year to set up but I convinced them that it was worth it for the employees' sake.