For small employers, offering a 401(k) isn’t just a checkbox on a benefits list—it can be a powerful tool for attracting and keeping talented staff, unlocking valuable tax advantages, and giving employees confidence in their long‑term financial health. Yet fewer than one in four small businesses sponsor a 401(k) plan, held back by real worries over setup costs, ongoing administrative demands, navigating ERISA requirements, and uncertainty around new incentives under the Secure Act 2.0.
The Secure Act 2.0 has leveled the playing field with measures designed specifically for smaller firms:
- Access to pooled Multiple Employer Plans for streamlined administration
- A startup credit of 100% of eligible costs (up to $5,000)
- An annual credit of $1,000 per employee for employer contributions (up to five years)
- A $500 per year credit for adopting automatic enrollment
To identify the top providers for 2025, we examined overall costs (in line with IRS limits for 2025), diversity and quality of investment choices, technology and user experience, depth of fiduciary and compliance support (aligned with Department of Labor ERISA standards), and the strength of customer service and educational resources. Our rankings reflect market share, a focus on small‑business needs, feedback from plan sponsors, and expert analysis.
Here are the top 12 401(k) providers for small businesses in 2025, each offering cost‑effective, compliant, and user‑friendly plan solutions.
1. Vanguard 401(k)
Vanguard has long been synonymous with low‑cost investing and a steadfast commitment to acting in investors’ best interests. Founded in 1975, Vanguard pioneered the index fund and built its reputation on offering simple, transparent products. That fiduciary ethos carries over into its 401(k) business: plan sponsors and participants benefit from economies of scale, minimal expense ratios, and a culture that prioritizes cost savings over flashy bells and whistles.
Overview
Vanguard’s retirement services leverage the firm’s roots in index‑based strategies. Their client‑owned structure means Vanguard operates “at‑cost,” passing savings on to employers and employees alike. Small businesses gain the same access to Vanguard’s signature funds—many with expense ratios as low as 0.03%—that large institutions enjoy, plus a governance model designed to avoid conflicts of interest.
Plan Features
- Traditional and Roth 401(k) options, letting employees choose between pre‑tax contributions or tax‑free growth
- Automatic enrollment and automatic contribution escalation, helping boost participation and savings rates
- Self‑directed brokerage window for experienced participants who want access to additional securities
- Option to include company stock as an investment choice
Cost Structure
Vanguard charges no setup fee. Instead, administration is covered by an asset‑based recordkeeping fee that varies by plan size—typically 0.10% to 0.15% of assets under management, often below industry averages of 0.25%. Participants investing exclusively in Vanguard funds pay the underlying fund expense ratios, some of the lowest in the market. Compared to providers whose combined asset and per‑participant fees can exceed 0.50%, Vanguard remains a standout for cost-conscious sponsors.
Investment Options
Plans can include Vanguard’s full lineup of mutual funds and ETFs, from broad‑market index funds to specialty bond and international equity funds. Once plan assets exceed $2 million, sponsors can add up to 12,000 non‑Vanguard funds, giving participants near‑unlimited choice without sacrificing the low‑cost core.
Technology & Support
The Vanguard plan sponsor portal offers an intuitive dashboard for monitoring participation, compliance testing, and discretionary limits. Participants enjoy a mobile app and web portal with tools for goal setting, fund comparison, and transaction history. Phone and email support is available during extended business hours, and a dedicated plan advisor helps navigate plan design, investment selection, and ERISA compliance.
Pros and Cons
Pros:
- Ultra‑low fees on core funds
- Owner‑client structure aligned with sponsor interests
- Automatic features that drive enrollment and savings
Cons:
- Asset‑based fees may take longer to amortize on very small plans
- Full fund lineup unlocks only after $2 million in assets
Ideal For
Small businesses with growing plan assets that prioritize the lowest possible fees and a proven fiduciary structure.
2. Fidelity Investments 401(k)
Fidelity Investments commands a substantial share of the retirement‑plan market, thanks to its blend of extensive investment lineups, advisory services, and turnkey administration. With decades of experience serving employers of all sizes, Fidelity pairs robust infrastructure with hands‑on support—making it a go‑to choice for small businesses that want a full‑service 401(k) provider.
Overview
As one of the largest retirement‑services firms in the U.S., Fidelity brings significant scale and expertise to small‑business plans. Their platform supports traditional, Roth, Safe Harbor, and automatic‑enrollment designs. Whether you’re a five‑employee startup or a 100‑person shop, Fidelity’s service model adapts to your needs, from basic recordkeeping to deep compliance and investment advisory.
Plan Features
- Multiple plan types: traditional, Roth, Safe Harbor, and automatic‑enrollment options
- Loan provisions and hardship‑withdrawal capabilities
- Financial wellness tools and one‑on‑one coaching for participants
- Plan design flexibility, including discretionary profit‑sharing and catch‑up contributions
Cost Structure
Fidelity charges a one‑time setup fee—typically around $500—followed by quarterly maintenance fees (around $300 per quarter). In addition, there’s a per‑participant recordkeeping fee (often $25 per quarter) and an asset‑based fee (about 0.125% of assets quarterly, or 0.50% annualized). While these fees can exceed index‑only providers, they cover a broad suite of services and educational offerings.
Investment Options
Participants can choose from thousands of mutual funds, exchange‑traded funds, and model portfolios. Fidelity’s target‑date funds and managed‑account services offer “set‑and‑forget” approaches, while self‑directed windows let experienced savers customize their own allocations.
Technology & Support
Fidelity’s online portal delivers real‑time plan analytics for sponsors and an intuitive dashboard for participants to track balances, run retirement‑income projections, and adjust contributions. Virtual and onsite education sessions help employees understand investment choices. Dedicated service teams are available via phone or email to troubleshoot plan‑specific questions or guide complex compliance tasks.
Pros and Cons
Pros:
- Vast selection of investment vehicles, including actively managed and index funds
- Integrated financial‑wellness resources and advice for employees
- Scalable service levels—from basic administration to full fiduciary support
Cons:
- Higher overall fees compared to purely index‑focused providers
- Fee complexity can be daunting for very small plans
Ideal For
Businesses that value a comprehensive, advisory‑driven experience—where investment choice, participant education, and strong compliance support justify a mid‑range fee structure.
3. Charles Schwab 401(k)
Charles Schwab leverages its long-standing reputation as a brokerage innovator to deliver a retirement plan platform built on transparency and robust technology. Established in 1973, Schwab brings decades of experience helping individuals and institutions manage investments, now tailored for small-business 401(k) sponsors.
Overview
Schwab’s retirement plan business mirrors its broader ethos: empower savers with low-cost tools and clear pricing. By focusing on open architecture, Schwab avoids steering sponsors into proprietary products, instead offering an unbiased selection of funds and commission-free trading on its own index funds and ETFs.
Plan Features
- Traditional, Roth, and Safe Harbor plan designs, with optional automatic enrollment
- Managed account programs that let participants tap professional guidance
- Advisor-assisted options for sponsors who want direct consultant involvement
- Customizable vesting schedules and discretionary profit-sharing provisions
Cost Structure
Schwab employs an asset-based recordkeeping fee—commonly around 0.15% of plan assets—with additional per-participant fees (often $40–$50 per year). Transaction fees on Schwab mutual funds and ETFs are waived, which can significantly reduce participant costs. While Schwab’s overall fee levels typically sit in the mid-range compared to ultra-low-cost providers, the clarity of pricing ensures sponsors know exactly what they’re paying.
Investment Options
Sponsors can build a diverse lineup with Schwab’s own index funds and ETFs alongside thousands of third-party mutual funds. Sample menus include core equity, bond, and target-date offerings, plus model portfolios for a one-click, risk-based strategy. The open-architecture design means plans aren’t restricted to Schwab products, giving participants broad choice.
Technology & Support
The Schwab Plan Participant Portal and mobile app provide an intuitive interface for enrollment, balance monitoring, and fund reallocation. Webinars and on-demand videos guide participants through retirement planning basics. Plan sponsors benefit from a dedicated service team for compliance testing, discretionary tasks, and custom reporting, all accessible via phone or secure messaging.
Pros and Cons
Pros:
- Transparent, asset-based pricing with no hidden transaction costs on Schwab funds
- Extensive fund lineup, including commission-free index funds and ETFs
- Robust online tools and educational resources
Cons:
- Fees may be higher than pure index providers on smaller plans
- Limited proprietary fund innovation compared to firms with larger in-house product suites
Ideal For
Small businesses seeking a balance between technology-driven user experience and advisor access, with transparent pricing and the flexibility to mix proprietary and third-party investments.
4. ADP 401(k)
ADP is a heavyweight in payroll services that extends its expertise to retirement plans, making contributions and compliance as seamless as running payroll itself. By bundling payroll and 401(k) administration, ADP helps small businesses eliminate data silos, reduce manual entry, and ensure that every deduction is accurately tracked for ERISA and IRS requirements.
Overview
ADP’s retirement platform is built on the same infrastructure that processes millions of paychecks each pay period. Whether you’re on ADP Workforce Now or RUN Powered by ADP, your 401(k) plan sits alongside payroll, benefits, and HR data in a unified system. This integration minimizes errors, streamlines year‑end testing, and simplifies ACA and Form 5500 filings.
Plan Features
- Three service tiers—Essential, Enhanced, and Premier—so you can scale features and fees to your budget
- Automatic enrollment and Roth 401(k) options to boost participation and offer tax‑diversified savings
- Integrated payroll deductions that post contributions in real time, reducing reconciliation headaches
- Built‑in compliance tools for nondiscrimination testing and safe‑harbor election management
Cost Structure
- Asset‑based recordkeeping fee, typically 0.10% of assets, subject to a minimum of about $30 per month
- Participant fees that vary by service tier, often ranging from $3 to $10 per employee per month
- No separate payroll‑retirement data‑transfer fees, since both services live in the same platform
Investment Options
ADP gives participants access to more than 13,000 mutual funds, ETFs, and target‑date portfolios. Plan sponsors can also build custom model portfolios or leverage ADP’s recommended lineups, designed by third‑party investment committees, to simplify decision‑making.
Technology & Support
- A single sign‑on experience through ADP Workforce Now or RUN, with real‑time visibility into retirement contributions
- Participant mobile app for on‑the‑go balance checks, fund changes, and retirement calculators
- Dedicated relationship managers at higher service tiers, plus fiduciary support options to help you meet ERISA 3(16) obligations
- Webinars, on‑site enrollment meetings, and extensive online resource libraries for employee education
Pros and Cons
Pros:
- Deep payroll‑retirement integration eliminates manual data entry
- Scalable service tiers that let you trade off cost and support
- Robust compliance and reporting tools built into a familiar HR platform
Cons:
- Fees rise significantly as you move to higher tiers
- Tiered structure can feel complex when you’re comparing features
- Participants may face varying fee schedules depending on the service level
Ideal For
Small businesses already on ADP payroll systems that want a one‑stop solution for HR, payroll, and retirement—especially those looking to minimize administrative overlap and leverage ADP’s compliance infrastructure.
5. Paychex 401(k)
Paychex has earned its stripes with small‑business owners by fusing payroll, HR, and retirement plan services under one roof. Since 1971, Paychex Flex has simplified the administrative headaches of 401(k) management by automating data flows from your payroll system straight into your retirement platform. This tight integration helps reduce errors, cut down on manual entry, and ensure timely contributions—all while you keep using the same familiar interface.
Overview
Paychex’s dual focus on payroll and benefits makes it a natural fit for businesses that want a single vendor handling both functions. Their retirement offering sits alongside pay, tax filings, and HR data in the Paychex Flex portal, providing real‑time visibility into deductions, compliance testing, and contribution tracking. Whether you have a handful of employees or a growing staff of 100, Paychex scales its service levels to match your needs.
Plan Features
- Traditional, Roth, SIMPLE and Safe Harbor 401(k) designs
- Automatic enrollment and optional automatic contribution escalation
- Loan provisions and hardship‑withdrawal mechanisms
- Discretionary profit‑sharing and catch‑up contribution capabilities
Cost Structure
- One‑time setup fee (varies by region and plan complexity)
- Monthly recordkeeping fee, typically bundled into a flat per‑participant charge
- Participant account fees, either a flat monthly amount or asset‑based charge
Investment Options
Paychex partners with leading investment managers to curate fund menus that balance cost and choice. Typical lineups include core equity, fixed‑income, and target‑date funds, plus optional specialty funds. While the range may not rival the thousands of options at larger recordkeepers, it covers most participants’ needs without overwhelming them.
Technology & Support
- Paychex Flex portal for sponsors: single sign‑on access to payroll, HR, and retirement data
- Participant mobile app and web portal for balance checks, fund changes, and retirement‑income calculators
- Live and on‑demand webinars, plus regional onsite enrollment meetings
- Dedicated plan advisor and phone‑based support for compliance, plan design, and fiduciary questions
Pros and Cons
Pros:
- Seamless payroll‑to‑retirement integration reduces manual entry and reconciliation
- Scalable service tiers let you dial up support as your headcount grows
- Well‑established brand with strong regional support
Cons:
- Mid‑range fee structure may be higher than pure index‑fund providers
- Fund menus are solid but more limited compared to open‑architecture platforms
- Plan complexity can increase administrative discussions around tiers and add‑ons
Ideal For
Small businesses already using Paychex payroll that want a unified system for HR, payroll, and retirement—particularly those looking to minimize data hand‑offs and leverage a single vendor for fiduciary and compliance support.
6. T. Rowe Price 401(k)
T. Rowe Price brings decades of pedigree in active fund management to the small‑business retirement arena. Founded in 1937, the firm built its reputation on rigorous research and disciplined portfolio construction. That heritage shows up in its 401(k) plans, which emphasize guided investment strategies and hands‑on advice—ideal for employers who want more than just a “set it and forget it” lineup.
Overview
With a focus on delivering value through active management, T. Rowe Price offers plan sponsors a suite of tools designed to keep participants engaged and on track for retirement. Their model leans on proprietary equity, fixed‑income, and target‑date funds, backed by an established research team. Small businesses gain access to these resources alongside flexible plan design and educational support.
Plan Features
- Traditional and Roth 401(k) options
- Automatic enrollment and optional automatic contribution escalation
- Advice tools that help participants choose funds based on age, risk tolerance, and savings goals
- Built‑in financial wellness workshops and webinars
Cost Structure
- Asset‑based administration fee, generally between 0.15% and 0.20% of plan assets
- Per‑participant recordkeeping charges (often $30–$40 per employee per year)
- No front‑ or back‑end sales loads on T. Rowe Price funds
- Transparent breakpoints as plan assets grow
Investment Options
- Actively managed equity, bond, and balanced funds driven by in‑house research
- Comprehensive family of target‑date funds with glide paths designed to reduce risk as participants age
- Specialty strategies—such as small‑cap and international allocations—for customized exposure
- Option to include non‑T. Rowe Price funds once plan assets exceed certain thresholds
Technology & Support
- Sponsor dashboard with real‑time plan analytics and compliance testing
- Participant portal featuring retirement‑income projections, interactive goal trackers, and fund comparison tools
- Toll‑free call center staffed by retirement specialists
- On‑site or virtual workshops to educate employees on saving strategies and market trends
Pros and Cons
Pros:
- Strong track record of active management and research‑driven funds
- Robust participant guidance, from digital advice modules to live workshops
- No hidden loads or revenue sharing on in‑house funds
Cons:
- Overall fees tend to run higher than index‑only providers
- Active funds may underperform in certain market cycles
- Best value often requires a minimum asset level to justify administration costs
Ideal For
Employers seeking a retirement plan anchored by active management and personalized advice. If your team values research‑driven fund choices and hands‑on education—even at a slightly higher fee—T. Rowe Price can deliver a plan that aligns with those priorities.
7. Betterment at Work 401(k)
Betterment at Work brings the company’s well‑known robo‑advisor platform into the employee‑savings arena. Instead of a sprawling menu of mutual funds, participants receive a personalized portfolio tailored to their risk profile, and the system takes care of ongoing rebalancing and tax‑efficient harvesting. For small businesses with limited internal resources, this low‑touch approach can deliver sophisticated investing without constant oversight.
Overview
Betterment at Work extends the direct‑to‑consumer robo‑advisor model to employers, automating portfolio construction based on each participant’s age, goals, and tolerance for risk. By focusing on algorithm‑driven advice, the platform simplifies both plan design and participant engagement, letting businesses offer a professional investment experience without a large advisory team.
Plan Features
- Automated portfolio creation: risk‑based model portfolios constructed from low‑cost ETFs
- Target‑date and target‑risk options: adjust allocations as participants’ careers progress
- Auto‑enrollment and automatic contribution escalation to boost savings rates
- Traditional and Roth 401(k) choices for tax‑diversified planning
- Financial coaching add‑on available in higher‑tier packages
Cost Structure
- One‑time setup fee: $500
- Annual platform fee: $1,200–$3,500, depending on service tier
- Per‑employee fee: $5–$8 per participant per month
- Participant investment fee: 0.25% of assets under management (employer‑pay option available)
Investment Options
- Core portfolios: diversified ETF baskets covering U.S. and international equity, fixed income, and real assets
- Social impact portfolios: options that tilt toward ESG‑aligned ETFs
- Custom portfolios: limited customization for high‑balance accounts or as a plan‑level feature
Technology & Support
- Intuitive web and mobile interface with goal‑tracking dashboards
- Automated rebalancing and tax‑loss harvesting built into all portfolios
- Participant notifications and educational content delivered in‑app
- Dedicated support team and optional financial coaching sessions for employees
Pros and Cons
Pros:
- Hands‑off, algorithm‑driven investing requires minimal plan‑sponsor intervention
- Transparent, flat‑fee pricing makes cost projections predictable
- Automatic features (enrollment, escalation) drive participation without manual upkeep
Cons:
- Limited ability to tailor portfolios beyond the core model offerings
- Asset‑based fee may feel steep on smaller balances, especially for early‑stage startups
- Fewer bells and whistles for sponsors accustomed to traditional recordkeeper reporting
Ideal For
Tech‑savvy small businesses that want a streamlined, automated retirement solution—one that delivers personalized investing without the administrative overhead of a traditional advisor‑driven plan.
8. ForUsAll
ForUsAll combines a mission‑driven mindset with cutting‑edge technology to simplify retirement saving for small businesses. Launched with the goal of making 401(k) administration more transparent and accessible, the platform is built around easy setup, clear pricing, and tools that help employers and employees alike understand their plan’s performance and costs.
Plan Features
ForUsAll supports all the core plan designs—Traditional, Roth, and Safe Harbor—and includes automatic enrollment to help jumpstart participation. Employers can tailor match formulas (dollar‑for‑dollar, tiered, or discretionary profit‑sharing) to meet budget and recruitment goals. Flexible plan provisions let sponsors dial in eligibility requirements, vesting schedules, and contribution limits that align with the company’s culture and cash flow.
Cost Structure
Rather than burying fees in a maze of asset and per‑transaction charges, ForUsAll publishes a simple billing model:
- A flat annual administration fee based on plan size
- A per‑participant recordkeeping fee
All underlying fund expenses are passed through directly to participants, without additional markup. This eliminates surprises at renewal time and makes it easy to forecast your total plan costs from year to year.
Investment Options
Participants choose from a curated set of target‑date funds, personalized model portfolios, and managed‑account solutions. Each lineup balances diversification with simplicity—so employees who just want to save can pick a target‑date fund, while those with more appetite for hands‑on investing can lean on the managed‑account option to adjust risk over time.
Technology & Support
The ForUsAll dashboard offers real‑time analytics on contributions, investment performance, and overall participation. Employers can run custom compliance tests with a few clicks, while employees access interactive tools and webinars that explain everything from asset allocation to Roth versus Traditional trade‑offs. If questions arise, a dedicated advisory team stands ready to guide you through plan design tweaks, ERISA requirements, or year‑end filings.
Pros and Cons
Pros:
- Fee transparency—no hidden administrative or custody charges
- Modern, mobile‑friendly interface for sponsors and participants
- Mission‑focused service with an emphasis on small‑business success
Cons:
- Relatively new to the market—smaller track record than legacy recordkeepers
- Fewer ancillary services (e.g., payroll integration or banking products) compared to full‑service providers
Ideal For
Companies that value clear, predictable pricing and a digital‑first plan experience. ForUsAll works best for small businesses ready to lean on technology—and a team of retirement experts—to deliver a straightforward, cost‑conscious 401(k) to their employees.
9. 401GO
401GO has carved out a niche among the top 401k providers by offering a mobile-first experience tailored to startups and tech‑savvy teams. With a streamlined setup and a modern interface, it delivers the essentials of a retirement plan without overwhelming small‑business sponsors.
Overview
Born with the startup ethos, 401GO emphasizes simplicity and speed. From initial onboarding—which can often be completed in days—to ongoing plan administration, its design philosophy revolves around minimizing friction. Employers benefit from a straightforward structure that skips unnecessary complexity, while employees enjoy an app-driven experience that mirrors the tools they use every day.
Plan Features
- Automatic enrollment and automatic contribution escalation to drive higher participation without manual oversight
- Traditional and Roth 401(k) options for tax-diversified savings
- Built‑in financial education modules that guide employees through saving milestones and investment basics
- Optional profit‑sharing contributions to reward individual or team performance
Cost Structure
401GO keeps pricing transparent with a two-part model:
- A flat annual administration fee that covers plan setup, compliance testing, and year‑end reporting
- A per‑participant fee that scales with your headcount, ensuring small teams pay proportionally less
Employers can choose to absorb participant fees or pass them along to individual accounts—an approach that helps control sponsor costs as the workforce grows.
Investment Options
Rather than presenting thousands of choices, 401GO offers curated low‑cost index fund portfolios and target‑date series. This focused lineup simplifies decision‑making for participants, ensuring they have access to diversified, cost‑efficient investments without getting lost in a sea of funds.
Technology & Support
- A mobile‑first app with real‑time account balances, contribution tracking, and push notifications
- A responsive web portal for plan sponsors to monitor participation rates, update plan settings, and access compliance documents
- Chat‑based support and email assistance, supplemented by educational articles and in‑app tutorials
Pros and Cons
Pros:
- Intuitive user interface that drives quick adoption
- Strong enrollment tools and built‑in education to boost engagement
Cons:
- Limited customization beyond core features
- Smaller fund lineup may not suit highly sophisticated investors
Ideal For
401GO is perfect for startups and tech‑focused small businesses that prioritize an exceptional user experience. If your team values a sleek, mobile‑centric platform and you prefer a hands‑off approach to plan management, 401GO stands out among the top 401k providers for its simplicity and speed.
10. ShareBuilder 401(k)
ShareBuilder delivers a no-frills, cost‑effective 401(k) solution with a fully digital interface. Designed for small businesses that want to offer a retirement plan without breaking the bank, ShareBuilder focuses on core features—automatic enrollment, contribution escalation, and a streamlined fund lineup—so sponsors can set it and largely forget it.
Overview
From signup to everyday management, ShareBuilder keeps things simple. There’s no expansive menu of add‑on services or confusing tiers. You get a straightforward plan structure, digital tools for enrollment and compliance, and a small‑business–friendly pricing model. This makes it easy to roll out a 401(k) offering even if you’ve never dabbled in retirement plans before.
Plan Features
- Automatic enrollment and automatic contribution escalation to increase participation and boost savings over time
- Traditional and Roth 401(k) options for flexible tax treatment
- Periodic reenrollment events to catch employees who initially opt out
- Contribution limits and eligibility rules configurable to your company’s needs
Cost Structure
ShareBuilder’s fees break down into two simple components:
- A low flat administration fee that covers setup, compliance testing, and year‑end reporting
- A modest per‑participant recordkeeping fee that scales with your headcount
Participants pay only the underlying expense ratios on the chosen funds—there’s no extra markup. This transparent billing makes it easy to predict your total plan costs and avoid surprise charges at renewal.
Investment Options
Rather than overwhelming employees with thousands of funds, ShareBuilder offers a curated lineup:
- Index and target‑date funds for broad diversification
- A handful of actively managed options for those who want more hands‑on strategies
This focused menu strikes a balance between choice and simplicity, ensuring employees aren’t paralyzed by too many options.
Technology & Support
All plan administration happens through an intuitive online portal:
- Digital enrollment wizard guides new hires through setup in minutes
- Sponsor dashboard displays participation rates, contribution activity, and compliance flags
- Participant site provides basic retirement calculators and fund performance charts
- Email and chat support to handle questions about setup, reporting, or technical issues
Pros and Cons
Pros:
- Extremely affordable, with clear, predictable fees
- Simple user experience that accelerates enrollment
- No hidden markups on fund expenses
Cons:
- Limited premium services like in‑depth investment advice or payroll integration
- Smaller fund lineup may not satisfy highly sophisticated investors
Ideal For
Very small businesses—especially those with fewer than 50 employees—that need a straightforward, low‑cost retirement plan. If you want to offer a 401(k) without a big administrative lift or high ongoing expenses, ShareBuilder is a strong contender.
11. Employee Fiduciary 401(k) Plan
Employee Fiduciary takes a transparent, compliance‑focused approach as a third‑party administrator (TPA). Rather than bundling recordkeeping with hidden revenue sharing, the firm lays out its fees up front and assumes many of the sponsor’s ERISA responsibilities. This model appeals to small businesses that want hands‑on fiduciary oversight without the conflicts of interest that can arise when providers earn kickbacks from fund companies.
Overview
Founded on the principle that sponsors should know exactly what they’re paying for, Employee Fiduciary serves as your 3(16) plan administrator. They assume many of the administrative and fiduciary duties under ERISA—documenting plan design, preparing Form 5500, running nondiscrimination tests, and more—helping you shift compliance tasks off your plate.
Plan Features
- 3(16) fiduciary services: handles day‑to‑day plan administration and ERISA compliance
- Customizable plan design: flexible vesting, eligibility, profit‑sharing and safe‑harbor options
- Automatic enrollment and automatic contribution escalation to boost participation rates
- Built‑in rebalancing to keep participant portfolios on target without manual intervention
Cost Structure
Employee Fiduciary publishes a simple fee schedule:
- Flat annual TPA fee, based on plan complexity
- Per‑participant recordkeeping fee, scalable with headcount
Participants pay only the underlying fund expense ratios—there’s no additional markup or revenue sharing on investments.
Investment Options
Sponsors can choose from an open‑architecture lineup of passive and active funds. Whether you prefer low‑cost index series, target‑date funds, or high‑conviction actively managed strategies, Employee Fiduciary lets you assemble a menu that fits your workforce’s risk profiles and savings goals.
Technology & Support
- Web‑based plan sponsor portal for real‑time compliance testing, reporting, and document storage
- Participant dashboard with basic goal‑setting tools and fund performance data
- Regular fiduciary‑education webinars and ERISA updates to keep you informed
- Direct access to plan consultants for one‑on‑one guidance on design tweaks, compliance questions, and year‑end tasks
Pros and Cons
Pros:
- Fee transparency—no surprises at renewal
- Strong compliance and fiduciary support removes a heavy ERISA burden
- Open‑architecture fund menus for maximum customization
Cons:
- Technology platform is functional but lacks some advanced user‑experience features
- Fewer integrated add‑on services (e.g., payroll, banking) compared with full‑service recordkeepers
Ideal For
Small businesses that need robust fiduciary oversight and clear, predictable costs. If you want to outsource ERISA administration to a dedicated TPA and maintain full control over investment choices—without hidden revenue sharing—Employee Fiduciary delivers a hands‑on, conflict‑free solution.
12. SaveDay
SaveDay reverses the traditional 401(k) fee structure by eliminating employer plan administration charges altogether. Instead of a sponsor‑paid TPA or recordkeeper fee, participants cover a transparent, asset‑based platform fee on their individual balances. This model allows small businesses to offer a robust retirement benefit without touching their operating budget.
Plan Features
SaveDay supports both Traditional and Roth 401(k) options, giving employees a choice between pre‑tax and after‑tax contributions. Automatic enrollment and automatic contribution escalation are built in, increasing participation and savings rates with minimal oversight. Employers can configure matching contributions or profit‑sharing allocations and establish custom vesting schedules to align with their talent‑retention strategies.
Cost Structure
- No employer plan administration fee
- Participants pay a flat, asset‑based platform fee plus standard fund expense ratios
- Fees scale directly with individual account balances, ensuring predictable costs
By shifting fees to participants, SaveDay enables employers to introduce or enhance a retirement plan with zero sponsor outlay.
Investment Options
Participants choose from a diversified fund lineup that includes low‑cost index funds, target‑date series, and Environmental, Social, and Governance (ESG) funds. This curated menu balances broad market exposure with the opportunity for values‑based investing, all at competitive expense ratios.
Technology & Support
Employers access a straightforward online portal for enrollment management, compliance testing, and contribution reporting. Participants enjoy a mobile app and web dashboard with real‑time balances, performance tracking, and retirement‑income projections. A comprehensive online help center and educational articles support both sponsors and savers through every step of plan administration and investment decision‑making.
Pros and Cons
Pros:
- Zero direct cost to the employer
- Transparent, participant‑paid fee model with no hidden markups
- ESG fund options for socially conscious investors
Cons:
- Participant fees may discourage lower‑balance savers
- Lacks some ancillary services, such as integrated payroll or on‑site education
Ideal For
SaveDay is a great fit for small employers who want to offer a 401(k) without any sponsor expense. It works best for businesses comfortable with employees assuming plan costs and teams that value straightforward fee transparency and ESG investment choices.
Making Your Final Choice
Choosing the right 401(k) provider means balancing multiple priorities: keeping plan costs in line with budgets, offering a robust lineup of investments, leveraging technology that simplifies administration, securing solid fiduciary support, and ensuring the solution can grow alongside your workforce. There’s no one-size-fits-all—what works for a five‑person startup may not fit a fifty‑employee firm. By weighing these core factors, you’ll zero in on the provider best suited to your culture and long‑term goals.
Here’s a quick checklist to guide your evaluation:
- Cost vs. features
- Startup and ongoing fees (asset‑based, per‑participant)
- Fund expense ratios and potential markups
- Technology and user experience
- Sponsor portal for compliance testing and reporting
- Participant interface (web and mobile) with enrollment tools
- Fiduciary and compliance support
- 3(16) plan administration options
- 3(38) investment manager services
- Scalability and integration
- Ability to handle more employees and assets
- Payroll and HR system integrations
- Education and customer service
- On‑site or virtual workshops, financial coaching
- Dedicated relationship managers or advisors
Before you sign on the dotted line, confirm that each provider maintains strong data‑security protocols—like encryption at rest and in transit, regular SOC or ISO audits—and complies with ERISA standards under Department of Labor fiduciary guidelines. A secure, compliant platform isn’t just a nice‑to‑have; it’s essential for protecting plan data and limiting sponsor liability.
Next steps: request demos to see each platform in action, gather proposals to compare fee structures side by side, and tap into professional advice where needed. At Summit Consulting Group, LLC, we specialize in guiding small businesses through these choices, handling administration, compliance, and fiduciary responsibilities so you can focus on your core business. Visit Summit Consulting Group’s homepage to explore how our turnkey solutions can streamline your retirement plan and safeguard your team’s future.
