Retirement accounts are typically your employees’ most valuable financial asset, with the exception of their homes. Yet, employers don’t always select a 401(k) plan that provides the most value and has the lowest fees. The consequences can be devastating to your employees’ retirement accounts as was recently illustrated in a study conducted by the Center for American Progress. The findings suggested that even modest fees of 1% of assets can wipe out $70,000 in retirement account savings. Fortunately, there are low-cost 401(k) providers in the market that specifically target small businesses. Last week, we had a chance to meet with Robby Forsythe, from The Online 401(k), to learn more about their low-fee based 401(k) plans.
Please explain your company’s value proposition to small businesses?
The Online 401(k) provides low-cost, easy to use, web-based 401(k) plans for small businesses. By sponsoring a 401(k) through our company, businesses attract and retain talented employees and save on corporate taxes. Furthermore, we work with each business separately to design a plan to meets their needs.
We also have a transparent flat-fee pricing structure and we don’t require minimums or employer matching. There are no hidden fees and we don’t charge a percentage of your 401(k) balance for plan administration. This helps to keep your investment costs very low.
What specific types of companies are well suited for your service?
We focus exclusively on serving small businesses. Of our 7,000+ clients, most have between 1 and 30 employees. We work with everyone from medical offices, to software developers, to corner stores. As long as the employees have internet access to view their 401(k), the company is a great fit.
What levels of support do you provide your clients?
We’re an online service, but all of our clients have a dedicated support specialist here at The Online 401(k). That means that whether you’re an employer or employee, you’ll be able to reach the same human being by phone or email each time you have a question.
How is your company able to provide flat-fee pricing?
The fact that we only charge flat fees, and never make any money through asset fees makes us very different from other 401(k) providers. We’ve managed our cost structure in such a way and grown quickly enough that we’re able to provide flat-free pricing.
What types of investment options are available to plan participants?
Our investment platform gives you access to over 26,000 mutual funds, index funds, and ETFs. We also offer turnkey options that help to make things easy and limit the employer’s fiduciary responsibility. If your company would prefer to work with a local investment advisor, we can accommodate that as well.
Can you provide an example of a business that benefited from your service?
I’ll provide two examples. I recently helped a tech startup company who was aggressively recruiting talent. The fact that they didn’t offer a 401(k) was becoming an obstacle. We designed a simple plan that keeps costs low and helps them land excellent candidates.
I also just worked with an orthodontist who had a huge tax bill each year. We designed a plan that allows him to efficiently reach his maximum personal benefit of $52,000 in tax deferred savings annually.
How should a business contact you if their interested in learning more?
They can contact me directly. I’d love to learn about their business and help to design a 401(K) solution to meet their needs. My name is Robby Forsythe and I’m a Senior Retirement Plan Consultant. My direct number is 415-593-5832 and my email address is rforsythe@theonline401k.com. You can also visit us here.
Tags: retirement planning, 401(k), small business, Ryan Himmel
