I'm an employer looking to get the best 401k deal for my employees!

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monsterid
Posts: 127
Joined: Sat Dec 31, 2016 7:10 pm

I'm an employer looking to get the best 401k deal for my employees!

Post by monsterid » Sat Oct 13, 2018 7:32 pm

Hi All,

I've been a boglehead for awhile (frequent reader, infrequent poster).

I'm the CFO of a small/medium sized company and so essentially I'm the final decision maker on benefits. I'm looking to add a 401k program as we are getting towards 30-40 employees. It won't have a match to start, but as the business continues to grow I hope to add that later.

I'm looking to see if anyone in the community has shopped for a 401k plan from an employer perspective (and the boglehead perspective). I want to ensure our team gets amazing plan options and the cost structure is reasonable consistent with all the values and best practices of bogleheads.

To date I've looked at Slavic 401k and Betterment and wasn't impressed with the 40-60bps AUM fee they charge for plan admin (either paid by the employee or by the employer).

Any tips would be greatly appreciated.

Cheers

MJS
Posts: 213
Joined: Sat Aug 05, 2017 10:55 pm

Re: I'm an employer looking to get the best 401k deal for my employees!

Post by MJS » Sat Oct 13, 2018 8:13 pm

Some states have inexpensive 401 programs for small businesses. If not yours .... call your state representatives.
https://www.marketwatch.com/story/dont- ... 2018-10-05

"... , 10 states — Maryland, Connecticut, New Jersey, New York, Washington state, Vermont and Massachusetts, in addition to Oregon, California and Illinois — have agreed to create a retirement program designed for the private sector, and nearly all other states are considering implementing one. "

RickBoglehead
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Re: I'm an employer looking to get the best 401k deal for my employees!

Post by RickBoglehead » Sat Oct 13, 2018 8:36 pm

Both Vanguard and Fidelity do this. As someone that has found Fidelity's NetBenefits service to be appalling, I'd suggest looking elsewhere, especially on a small program where you won't matter.

https://institutional.vanguard.com/web/ ... plan/focus

stan1
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Re: I'm an employer looking to get the best 401k deal for my employees!

Post by stan1 » Sat Oct 13, 2018 8:38 pm

I am aware of "Ubiquity" and "Employee Fiduciary" who specialize in working with smaller businesses but have no other personal experience good or bad with them. Employee Fiduciary says they offer Vanguard funds and their AUM fee is 8 bps.

gclancer
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Re: I'm an employer looking to get the best 401k deal for my employees!

Post by gclancer » Sat Oct 13, 2018 8:41 pm

stan1 wrote:
Sat Oct 13, 2018 8:38 pm
I am aware of "Ubiquity" and "Employee Fiduciary" who specialize in working with smaller businesses but have no other personal experience good or bad with them. Employee Fiduciary says they offer Vanguard funds and their AUM fee is 8 bps.
Employee Fiduciary should be on your short list.

monsterid
Posts: 127
Joined: Sat Dec 31, 2016 7:10 pm

Re: I'm an employer looking to get the best 401k deal for my employees!

Post by monsterid » Sat Oct 13, 2018 8:53 pm

gclancer wrote:
Sat Oct 13, 2018 8:41 pm
stan1 wrote:
Sat Oct 13, 2018 8:38 pm
I am aware of "Ubiquity" and "Employee Fiduciary" who specialize in working with smaller businesses but have no other personal experience good or bad with them. Employee Fiduciary says they offer Vanguard funds and their AUM fee is 8 bps.
Employee Fiduciary should be on your short list.
Just sent them an enquiry!

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BoglePaul
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Re: I'm an employer looking to get the best 401k deal for my employees!

Post by BoglePaul » Sat Oct 13, 2018 8:57 pm

RickBoglehead wrote:
Sat Oct 13, 2018 8:36 pm
Both Vanguard and Fidelity do this. As someone that has found Fidelity's NetBenefits service to be appalling, I'd suggest looking elsewhere, especially on a small program where you won't matter.

https://institutional.vanguard.com/web/ ... plan/focus
I will say that they are all terrible. So terrible, I wish 401k's did not exist and individuals could choose their own IRA instead.

ADP and PayChex 401k's were abhorrent experiences for us (the business to business experience and the erroneous record keeping). Fidelity's NetBenefits has been our best experience but the bar is low. At least Fidelity employs the people doing the record keeping. Vanguard outsources the 401k record keeping to a 3rd party for small businesses with under $25M in assets. While I am a big fan of Vanguard, I would recommend Fidelity for a small business 401k.

stan1
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Re: I'm an employer looking to get the best 401k deal for my employees!

Post by stan1 » Sat Oct 13, 2018 9:06 pm

I found this thread on Employee Fiduciary:
viewtopic.php?t=244838

There's quite a few more, probably worth searching and if you PM a few posters you might get a response.

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Smorgasbord
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Re: I'm an employer looking to get the best 401k deal for my employees!

Post by Smorgasbord » Sat Oct 13, 2018 10:23 pm

About two years ago I also got to choose the 401k for my company. I forget the exact fees/expenses, but I remember the two finalists were Vanguard managed by Acensus and Employee Fiduciary. Employee Fiduciary was better when the plan has less than about a million in it, and Vanguard was better over a million. How fast do you think your plan will get to a million in assets?

monsterid
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Re: I'm an employer looking to get the best 401k deal for my employees!

Post by monsterid » Sat Oct 13, 2018 10:32 pm

Probably 2 years.

anonenigma
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Re: I'm an employer looking to get the best 401k deal for my employees!

Post by anonenigma » Sat Oct 13, 2018 10:46 pm

Consider Vanguard. My wife's organization just went with them and decided to pay the annual fee for employees.

cutterinnj
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Re: I'm an employer looking to get the best 401k deal for my employees!

Post by cutterinnj » Sat Oct 13, 2018 10:52 pm

I was in the same predicament as you a few years back; when I took on the role, we were using an insurance company- obviously a big mistake based on charges!

We moved over to Ascensus, which was Vanguard's platform for a few years. The fees were MUCH better; however, they did not supply the fiduciary support that a business needs. After they failed to file the correct tax forms over and over again, in addition to the new Fiduciary law, we decided to change again.

We currently use Paychex for our HR management, and they offer 401(k) with full support for the Fiduciary law; the LAST thing you want is for an employee to sue you 20 years from now because an "i wasn't dotted"; we pay a bit more for this support vs. Ascensus, but it helps us sleep better at night knowing that the laws are followed exactly.

You may want to inquire with your HR platform if they support a 401(k) plan; most do, and most will likely negotiate to a lower rate if they know you are looking at low cost leaders like Ascensus or Employee Fiduciary.

monsterid
Posts: 127
Joined: Sat Dec 31, 2016 7:10 pm

Re: I'm an employer looking to get the best 401k deal for my employees!

Post by monsterid » Sat Oct 13, 2018 10:54 pm

anonenigma wrote:
Sat Oct 13, 2018 10:46 pm
Consider Vanguard. My wife's organization just went with them and decided to pay the annual fee for employees.
Yup, will definitely ask for a quote.

monsterid
Posts: 127
Joined: Sat Dec 31, 2016 7:10 pm

Re: I'm an employer looking to get the best 401k deal for my employees!

Post by monsterid » Sat Oct 13, 2018 10:55 pm

cutterinnj wrote:
Sat Oct 13, 2018 10:52 pm
I was in the same predicament as you a few years back; when I took on the role, we were using an insurance company- obviously a big mistake based on charges!

We moved over to Ascensus, which was Vanguard's platform for a few years. The fees were MUCH better; however, they did not supply the fiduciary support that a business needs. After they failed to file the correct tax forms over and over again, in addition to the new Fiduciary law, we decided to change again.

We currently use Paychex for our HR management, and they offer 401(k) with full support for the Fiduciary law; the LAST thing you want is for an employee to sue you 20 years from now because an "i wasn't dotted"; we pay a bit more for this support vs. Ascensus, but it helps us sleep better at night knowing that the laws are followed exactly.

You may want to inquire with your HR platform if they support a 401(k) plan; most do, and most will likely negotiate to a lower rate if they know you are looking at low cost leaders like Ascensus or Employee Fiduciary.
Payroll is with Justworks (PEO), they use Slavic. It has a 60bp AUM fee, which to me seems high. In your experience how does that map to what you paid?

JBTX
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Re: I'm an employer looking to get the best 401k deal for my employees!

Post by JBTX » Sat Oct 13, 2018 11:00 pm

We are in the process of switching to Vanguard on Ascensus platform. Partnered up with a local small company 401k advisor to help provide Fiduciary oversight.

cutterinnj
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Re: I'm an employer looking to get the best 401k deal for my employees!

Post by cutterinnj » Sat Oct 13, 2018 11:11 pm

monsterid wrote:
Sat Oct 13, 2018 10:55 pm
Payroll is with Justworks (PEO), they use Slavic. It has a 60bp AUM fee, which to me seems high. In your experience how does that map to what you paid?
When all things were taken into account with the fees that Ascensus was charging us for record keeping and the lack of Fiduciary law compliance, it's roughly a wash using Paychex for us. I don't think it was quite that high.
Also easier to manage and easier for our employees to use, as it's in the same web portal as their time clock application, vacation and time off requests, etc...

beagler1
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Re: I'm an employer looking to get the best 401k deal for my employees!

Post by beagler1 » Sun Oct 14, 2018 4:08 pm

Check out guideline.com too.

MotoTrojan
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Re: I'm an employer looking to get the best 401k deal for my employees!

Post by MotoTrojan » Sun Oct 14, 2018 4:58 pm

beagler1 wrote:
Sun Oct 14, 2018 4:08 pm
Check out guideline.com too.
Agreed. Excellent funds at VG price plus a couple DFA for those that like to tilt more aggressively.

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