Small company 401k plans

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JBTX
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Small company 401k plans

Post by JBTX » Fri Apr 06, 2018 10:46 am

Looking for help with small company 401k plans.
Last edited by JBTX on Fri Aug 03, 2018 7:14 pm, edited 1 time in total.

niceguy7376
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Re: Small company 401k plans

Post by niceguy7376 » Fri Apr 06, 2018 11:07 am

Some names I read in this forum are Employee Fiduciary, guideline.

Did Fido recommend any TPA (Third Party Administrator)?

kmurp
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Re: Small company 401k plans

Post by kmurp » Fri Apr 06, 2018 11:16 am

We use Newport for our plan which has maybe 40 members.

anil686
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Re: Small company 401k plans

Post by anil686 » Fri Apr 06, 2018 11:24 am

Went through this switching from Nationwide to now Vanguard/Ascensus three years ago. Vanguard uses Ascensus for smaller plans - pricing was not bad and they offer TPA services bundled. I think it is a flat fee of about $2500 per year for recordkeeping up to 25 employees and then $25 per employee more per year. Can't remember the total off the top of my head. In addition, TPA fees were like $1000. Fund costs (base) were admiral shares and for funds not Admiral shares (like TR funds) - they were credited to be admiral shares with a rebate.


After those costs - it is only the costs of the funds. Our business likes to pay the expenses separate from the plan since it results in lower ERs for everybody (of course selfishly for the owners of the business who have the most assets - it is great for us too not to mention the business tax break). You can of course roll in the fees to the plan but that will increase the fund ERs by the amount of the costs. One thing to look for - at least with our old FA who had us in the nationwide plan - was they kept on saying it is a free plan (i.e. you don't pay anything per year to set it up) - of course the costs were rolled into the plan for both the FA and the recordkeeping so the cheapest SP500 fund was 0.75% ER. And they told us not to switch because VG was going to charge us $3500 per year! Of course your business will have to see what is cheaper - but at an ER of 2% and 25 employees - hard for me to imagine a "free plan" is going to cost less than the VG plan - JMO though..

Other mentioned a lot here are Employee Fiduciary - I think they are even cheaper.

Hope this helps...

smitcat
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Re: Small company 401k plans

Post by smitcat » Fri Apr 06, 2018 11:26 am

JBTX wrote:
Fri Apr 06, 2018 10:46 am
Going to help my friend shop their 401k plan. They currently have John Hancock plan, and it is somehow brokered through Edward Jones. Last time I checked the fees run somewhere in the 1.5-2.0 %range.

What are other options available in that space? I called vanguard and a representative is going to call me back. Called Fidelity and they said they just act as investment shell, you have to find your own third party administrator.

I will sit in on their meeting with Edward Jones guy in a week or two. If anybody has been through this, what sort of questions should I ask, and what other options should we be investigating?
We have employee Fiduciary for about 2-1/2 years now with no problems for a safe harbor plan. I have read here that some have had issues with their (EF) qualifications of employees but we have not had that or any other issues.
About 40 employees total with about 8 participating at any one point in time in addition to us.

KSActuary
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Re: Small company 401k plans

Post by KSActuary » Fri Apr 06, 2018 11:49 am

1.5% - 2% is highway robbery!

Your external relationships with recordkeeper/TPA will depend on how much work you want to take internal. A 25 person 401k is very easy to administer (just a payroll upload) so a TPA may only be necessary if you do not have someone that can process the upload or you just don't want the hassle (medical office, etc).

Employee Fiduciary is 1,500 (first 30 eligibles and $30 per eligible thereafter) plus 0.08% of assets

You want a fixed recordkeeping and advisory fee for the plan - no asset-based fees!

Vanguard is 3,475 plus 75 times participants over 15 = 4,225.

Put the amount of plan assets up and I can tell you what you can get in a fixed fee environment.

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roymeo
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Re: Small company 401k plans

Post by roymeo » Fri Apr 06, 2018 11:50 am

I don't know the fees, but our small company uses Slavik and has Vanguard funds and seems to have reasonable (and transparent) fees.
https://www.slavic401k.com/
The sewer system is a form of welfare state. | -- "Libra", Don DeLillo

MotoTrojan
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Re: Small company 401k plans

Post by MotoTrojan » Fri Apr 06, 2018 11:52 am

niceguy7376 wrote:
Fri Apr 06, 2018 11:07 am
Some names I read in this forum are Employee Fiduciary, guideline.

Did Fido recommend any TPA (Third Party Administrator)?
2nd'd

KSActuary
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Re: Small company 401k plans

Post by KSActuary » Fri Apr 06, 2018 11:53 am

Employee Fiduciary charges by eligible employee, not participants with a balance.

LT Trust will charge 1,700 plus 48 times 15 (participants with a balance over 10) plus a 0.10% asset charge.

JBTX
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Re: Small company 401k plans

Post by JBTX » Fri Apr 06, 2018 12:07 pm

Thanks to all. Just got off the phone with Employee Fiduciary. They look really competitive.

$1500 base fee up to 30 employees and $30 per each head over 30.

Across the board asset fees are 0.08%. Combined base fee + across the board feesyou are looking at about $2000 per year, which would be around 0.4% all rolled in which is a heck of a lot better than what they are getting with Hancock.

This was extremely helpful. If you have any other tips keep them coming!!
Last edited by JBTX on Fri Aug 03, 2018 7:21 pm, edited 1 time in total.

JBTX
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Re: Small company 401k plans

Post by JBTX » Fri Apr 06, 2018 12:14 pm

KSActuary wrote:
Fri Apr 06, 2018 11:49 am
1.5% - 2% is highway robbery!

Your external relationships with recordkeeper/TPA will depend on how much work you want to take internal. A 25 person 401k is very easy to administer (just a payroll upload) so a TPA may only be necessary if you do not have someone that can process the upload or you just don't want the hassle (medical office, etc).

Employee Fiduciary is 1,500 (first 30 eligibles and $30 per eligible thereafter) plus 0.08% of assets

You want a fixed recordkeeping and advisory fee for the plan - no asset-based fees!

Vanguard is 3,475 plus 75 times participants over 15 = 4,225.

Put the amount of plan assets up and I can tell you what you can get in a fixed fee environment.
This is what they quoted me over phone.

Does this include TPA? Also, does the 0.08% include individual fund fees or would I have to add those separately?

KSActuary
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Re: Small company 401k plans

Post by KSActuary » Fri Apr 06, 2018 12:35 pm

The fee quoted assumes a bundled approach where there is no separate TPA (Employee Fiduciary will be the TPA internally).

TPA use depends a lot on internal employer staff, etc.

The 0.08% fee is for trading on the Matrix platform and are in addition to the fund fees. We have never been able to get them to waive it on the plans we have with them.

We don;t use them a lot as they are not competitive at larger plan asset size but would use them for a plan like yours.

Ask any other questions you have, happy to answer them.

JBTX
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Re: Small company 401k plans

Post by JBTX » Fri Apr 06, 2018 1:09 pm

So are there any downsides of Employee Fiduciary? Everything I am hearing and reading indicates they are the best fit.

KSActuary
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Re: Small company 401k plans

Post by KSActuary » Fri Apr 06, 2018 1:27 pm

The biggest difference that you will see is the difference in technology, especially since you are coming from John Hancock. Not that EF is bad but not up to par with Hancock. We do not get any complaints regarding the web site but most of the clients that fit the EF model (small / new plan) may not have anything to really compare it to. On the flip side, how many participants really use the web site anyway?

Raabe34
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Re: Small company 401k plans

Post by Raabe34 » Fri Apr 06, 2018 2:00 pm

The real question is just how complex of a plan is it? If all you're talking about is some people contributing and 5% match for example you are in a super simple state. If the plan is in place to let the owner's max out it's a whole different scenario. The plan most likely has a TPA under Hancock doing the work on the back. If it's complex you might be able to keep the TPA and just find a recordkeeper like aspire or maybe EF will do just the recordkeeping work.

In the end the investments are secondary to plan being administered correctly for the goal of the owners. Search for the post about EF's issues.

KSActuary
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Re: Small company 401k plans

Post by KSActuary » Fri Apr 06, 2018 2:31 pm

roymeo wrote:
Fri Apr 06, 2018 11:50 am
I don't know the fees, but our small company uses Slavik and has Vanguard funds and seems to have reasonable (and transparent) fees.
https://www.slavic401k.com/
I have never seen the fees for Slavic401k? Care to share them to the community?

I could see a sticky or available resource here for fees and expenses.

KSActuary
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Re: Small company 401k plans

Post by KSActuary » Fri Apr 06, 2018 2:34 pm

Just googled Slavic, do they really charge 95 basis points?

JBTX
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Re: Small company 401k plans

Post by JBTX » Mon Apr 09, 2018 8:42 pm

As a follow up I called Vanguard early Friday. You have to give them information and they call you back. Still haven’t called back.

For those who have Vanguard small company plan, is this indicative of the level of service? I ask not to complain, but to help figure out whether to rule them out as an option.

Thanks.

JBTX
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Re: Small company 401k plans

Post by JBTX » Mon Apr 09, 2018 9:36 pm

One other thing, I am trying to figure out the difference in 3(38) , 3(16)

One site seems to imply you should get provider with both

https://www.forusall.com/3-16-fiduciary/
Rooted in this belief, we offer full 3(16) fiduciary services on all of our plans, no matter the size. And we relieve our client of the work and liability for the following plan administration responsibilities:

Review, process, and monitor all 401(k) loans
Maintain plan documents for IRS/DOL laws
Track employee eligibility and send the right notices and disclosures.
Review, approve, process, and document all hardship withdrawals
Make sure your employee communications meet the Department of Labor's requirements.
Make sure nondiscrimination tests were run appropriately, then review, sign, and submit IRS filings (especially your Form 5500).
Make sure 401(k) plan rules are followed (example: making sure contributions are legitimate, tracking loans, etc.)
Notify plan administrator of any observed plan irregularities
Ensure plan administrator maintains fiduciary insurance and a sufficient fidelity bond
Ensure employee contributions are processed correctly and credited to employee accounts quickly.
Manage and send participant notices and disclosures, including: Annual 404(a)(5) notices, Annual Qualified Default Investment Alternative (QDIA), Safe harbor notices, Summary annual reports, & Summary of material modifications
I don’t know if Employee Fiduciary does this or how much of an issue this is.

Spirit Rider
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Re: Small company 401k plans

Post by Spirit Rider » Mon Apr 09, 2018 9:55 pm

JBTX wrote:
Mon Apr 09, 2018 8:42 pm
As a follow up I called Vanguard early Friday. You have to give them information and they call you back. Still haven’t called back.

For those who have Vanguard small company plan, is this indicative of the level of service? I ask not to complain, but to help figure out whether to rule them out as an option.
Vanguard only acts as the custodian for the plan. The plan is actually administered by Ascensus. Ascensus is one of the largest TPAs for small business plans. They actually provide the plan document for Vanguard's Individual 401k.

Given Vanguards ongoing customer service problems, you are far better off contacting Ascensus directly. Thankfully, you will be dealing with them on an ongoing basis anyway.

yowzer9
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Re: Small company 401k plans

Post by yowzer9 » Mon Apr 09, 2018 10:11 pm

I've been with Employee Fiduciary for 5 years. No issue. The price is good. Customer service has been solid.

I did some comparison shopping the last year and I found EF to be the clear leader. Some of the newer services limit the profit sharing options, for example.

I'm hopeful that one of these days, a company 401k plan will work like a Simple IRA plan. But until then, EF all the way.

anil686
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Re: Small company 401k plans

Post by anil686 » Mon Apr 09, 2018 10:17 pm

Spirit Rider wrote:
Mon Apr 09, 2018 9:55 pm
JBTX wrote:
Mon Apr 09, 2018 8:42 pm
As a follow up I called Vanguard early Friday. You have to give them information and they call you back. Still haven’t called back.

For those who have Vanguard small company plan, is this indicative of the level of service? I ask not to complain, but to help figure out whether to rule them out as an option.
Vanguard only acts as the custodian for the plan. The plan is actually administered by Ascensus. Ascensus is one of the largest TPAs for small business plans. They actually provide the plan document for Vanguard's Individual 401k.

Given Vanguards ongoing customer service problems, you are far better off contacting Ascensus directly. Thankfully, you will be dealing with them on an ongoing basis anyway.
+1

We have a VG/Ascensus plan - Ascensus customer service has been great.

jdasch9
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Re: Small company 401k plans

Post by jdasch9 » Mon Apr 09, 2018 11:12 pm

I recently moved my company (10 employees) from John Hancock (1.5-2% total ER) to Guideline. I was thoroughly impressed with the experience, pricing, plan menu, and interface. I highly, highly recommend checking them out.

The cost is $40/month base (covers 5 participants) + $8 for the 6th and every other after that. No AUM. About 40 Vanguard funds to choose from.You'll be looking at 6-10 BPS instead of 150-200. I am in heaven!

KSActuary
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Re: Small company 401k plans

Post by KSActuary » Tue Apr 10, 2018 9:21 am

Vanguard is $3,475 for the first 15 employees plus $75 for the next 35. Next 50 are $70.

Ascensus has a slightly different schedule, I believe that the starting price is for 25 employees, 15 employees where employees is participants with a balance.

We go through Vanguard pretty much exclusively. They prefer an advisor relationship which works great for us as we charge a flat fee only for each plan.

The Vanguard service has been very good without any of the retail problems being discussed here.

Put the stats up for the plan and I can price it for you Vanguard or Ascensus.

JBTX
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Re: Small company 401k plans

Post by JBTX » Tue Apr 10, 2018 10:35 am

KSActuary wrote:
Tue Apr 10, 2018 9:21 am
Vanguard is $3,475 for the first 15 employees plus $75 for the next 35. Next 50 are $70.

Ascensus has a slightly different schedule, I believe that the starting price is for 25 employees, 15 employees where employees is participants with a balance.

We go through Vanguard pretty much exclusively. They prefer an advisor relationship which works great for us as we charge a flat fee only for each plan.

The Vanguard service has been very good without any of the retail problems being discussed here.

Put the stats up for the plan and I can price it for you Vanguard or Ascensus.
........
Last edited by JBTX on Fri Aug 03, 2018 7:16 pm, edited 1 time in total.

Nummerkins
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Re: Small company 401k plans

Post by Nummerkins » Tue Apr 10, 2018 10:54 am

JBTX wrote:
Tue Apr 10, 2018 10:35 am
Approx 25 employees, approx half participate, I am guessing around $500k in total plan assets. Those are guesses, I don't know exact numbers.
You can find the number of participants and plan balance by doing a form 5500 lookup. All publicly available info.

JBTX
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Re: Small company 401k plans

Post by JBTX » Tue Apr 10, 2018 10:58 am

jdasch9 wrote:
Mon Apr 09, 2018 11:12 pm
I recently moved my company (10 employees) from John Hancock (1.5-2% total ER) to Guideline. I was thoroughly impressed with the experience, pricing, plan menu, and interface. I highly, highly recommend checking them out.

The cost is $40/month base (covers 5 participants) + $8 for the 6th and every other after that. No AUM. About 40 Vanguard funds to choose from.You'll be looking at 6-10 BPS instead of 150-200. I am in heaven!
Thanks for the link! I just called them. Interesting alternative.

Basically they quoted what you just said. And it sounds like they are full soup to nuts service 338+316 - Employee Fiduciary is not full 316.

Only downsides are:

They don't offer target date fund options (to keep fees ultra low)
They have only been around 2.5 years and are relatively small - $360 Million assets under management.

KSActuary
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Re: Small company 401k plans

Post by KSActuary » Tue Apr 10, 2018 3:23 pm

JBTX wrote:
Tue Apr 10, 2018 10:35 am
KSActuary wrote:
Tue Apr 10, 2018 9:21 am
Vanguard is $3,475 for the first 15 employees plus $75 for the next 35. Next 50 are $70.

Ascensus has a slightly different schedule, I believe that the starting price is for 25 employees, 15 employees where employees is participants with a balance.

We go through Vanguard pretty much exclusively. They prefer an advisor relationship which works great for us as we charge a flat fee only for each plan.

The Vanguard service has been very good without any of the retail problems being discussed here.

Put the stats up for the plan and I can price it for you Vanguard or Ascensus.
Approx 25 employees, approx half participate, I am guessing around $500k in total plan assets. Those are guesses, I don't know exact numbers.
With 12 - 13 participants with a balance, the Vanguard fee is $3,475, or 70 basis points. The Guideline quote will be about a third of that number, if I remember correctly.

I would expect Guideline to follow other private equity start-ups such as HonestDollar, etc. Gather assets with inexpensive fees and then sell to a major. It is a great model. Look what's going on with Betterment for Business. They have lowered their fees considerably on the 401k side to compete with firms like Guideline. Who knows how all this will turn out.

I would also request how the managed models have performed over the time they have been around (2 - 3 years). It's just not about fees. If the performance is poor then the low fees really don't matter. There can be a material difference in performance between two firms that use Vanguard index funds and no TDF would be somewhat of a worry as they force some of your default employees into the models. I can tell you how the performance compares as we keep that all up to date for many of the providers.

JBTX
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Re: Small company 401k plans

Post by JBTX » Tue Apr 10, 2018 3:26 pm

KSActuary wrote:
Tue Apr 10, 2018 3:23 pm
JBTX wrote:
Tue Apr 10, 2018 10:35 am
KSActuary wrote:
Tue Apr 10, 2018 9:21 am
Vanguard is $3,475 for the first 15 employees plus $75 for the next 35. Next 50 are $70.

Ascensus has a slightly different schedule, I believe that the starting price is for 25 employees, 15 employees where employees is participants with a balance.

We go through Vanguard pretty much exclusively. They prefer an advisor relationship which works great for us as we charge a flat fee only for each plan.

The Vanguard service has been very good without any of the retail problems being discussed here.

Put the stats up for the plan and I can price it for you Vanguard or Ascensus.
Approx 25 employees, approx half participate, I am guessing around $500k in total plan assets. Those are guesses, I don't know exact numbers.
With 12 - 13 participants with a balance, the Vanguard fee is $3,475, or 70 basis points. The Guideline quote will be about a third of that number, if I remember correctly.

I would expect Guideline to follow other private equity start-ups such as HonestDollar, etc. Gather assets with inexpensive fees and then sell to a major. It is a great model. Look what's going on with Betterment for Business. They have lowered their fees considerably on the 401k side to compete with firms like Guideline. Who knows how all this will turn out.

I would also request how the managed models have performed over the time they have been around (2 - 3 years). It's just not about fees. If the performance is poor then the low fees really don't matter. There can be a material difference in performance between two firms that use Vanguard index funds and no TDF would be somewhat of a worry as they force some of your default employees into the models. I can tell you how the performance compares as we keep that all up to date for many of the providers.
How do you define "performance"

KSActuary
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Re: Small company 401k plans

Post by KSActuary » Tue Apr 10, 2018 3:34 pm

Most internet 401k providers, such as Guideline, will provider annual performance numbers for their models. Looks like Guideline offers 6 model portfolios with varying levels of equity/fixed income allocations. Some of your less interested participants will default into a model based on risk tolerance. Most 401k plans would offer a TDF as the 404(c) default election whose performance is readily available. It would be interesting to see their actual (and even their backtested) results for the models because this is what many of your participants are investing in. If the performance is off by 1% - 2% due to allocation/management then the cheap up front price doesn't really help.

As a fiduciary, you must select a plan that has reasonable costs. You should also look at performance for default elections. Just because Guideline is a 3(38) doesn't remove the responsibility from the fiduciary to make sure they are doing their job.

KSActuary
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Re: Small company 401k plans

Post by KSActuary » Tue Apr 10, 2018 3:49 pm

You could also look into LT Trust. Very similar to EF but charge by participants with a balance. Cost would be about be about 1,800 per year plus 10 basis point asset fee. They use an open architecture fund universe so you could get Vanguard TDF if you want.

jacoavlu
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Re: Small company 401k plans

Post by jacoavlu » Fri May 11, 2018 7:08 pm

Our small PC plan (4 owners, 1 employee) has I’m guessing $2M in assets. Our goal is to maximize benefit to owners. Basically, we max out and plan testing tells us what to contribute to 1 non HCE.

Guideline only offers comp to comp (pro rata) and equal amount profit sharing which doesn’t fit what we want.

Right now we use a small regional firm and I think we pay about $3k/yr, with self directed brokerage accounts. Service level has declined a bit which has me thinking about shopping around.

Worth talking to Employee Fiduciary or anyone else to shop prices?

misterno
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Re: Small company 401k plans

Post by misterno » Sat May 12, 2018 8:52 pm

Not intending to hijack the thread but can someone recommend me the cheapest TPA and overall service for a sole prop with 2 partners set up as Qualified Joint Venture?

There will only be 2 people who are partners and no employees. I got plenty of time so I would like to do the administrative work myself. So what is the best alternative for me?

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JamesSFO
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Re: Small company 401k plans

Post by JamesSFO » Sat May 12, 2018 10:50 pm

I will put in for Vanguard/Ascensus, all customer support is through Ascensus and they are great. Since we are a small employer and I am one of the owners and have the largest plan balance get most of the benefit from NOT having an 8 basis point fee on funds (Employee Fiduciary) and others charge. Our employees (and me) get the Admiral funds at their exact basis with no fees to them, we pay everything. This is a <10 person plan with 2 owners and over $2M in assets.

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JamesSFO
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Re: Small company 401k plans

Post by JamesSFO » Sat May 12, 2018 10:51 pm

misterno wrote:
Sat May 12, 2018 8:52 pm
Not intending to hijack the thread but can someone recommend me the cheapest TPA and overall service for a sole prop with 2 partners set up as Qualified Joint Venture?

There will only be 2 people who are partners and no employees. I got plenty of time so I would like to do the administrative work myself. So what is the best alternative for me?
If you are both owners an individual or solo 401K might work... Check those threads.

Spirit Rider
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Re: Small company 401k plans

Post by Spirit Rider » Sun May 13, 2018 7:15 pm

JamesSFO wrote:
Sat May 12, 2018 10:51 pm
misterno wrote:
Sat May 12, 2018 8:52 pm
Not intending to hijack the thread but can someone recommend me the cheapest TPA and overall service for a sole prop with 2 partners set up as Qualified Joint Venture?

There will only be 2 people who are partners and no employees. I got plenty of time so I would like to do the administrative work myself. So what is the best alternative for me?
If you are both owners an individual or solo 401K might work... Check those threads.
Based on other threads I believe misterno: might be looking for a TPA to provide a custom one-participant 401k plan that supports employee after-tax contributions and in-service rollovers. This feature set is not available from mainstream providers.

KSActuary
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Re: Small company 401k plans

Post by KSActuary » Sun May 13, 2018 8:52 pm

jacoavlu wrote:
Fri May 11, 2018 7:08 pm
Our small PC plan (4 owners, 1 employee) has I’m guessing $2M in assets. Our goal is to maximize benefit to owners. Basically, we max out and plan testing tells us what to contribute to 1 non HCE.

Guideline only offers comp to comp (pro rata) and equal amount profit sharing which doesn’t fit what we want.

Right now we use a small regional firm and I think we pay about $3k/yr, with self directed brokerage accounts. Service level has declined a bit which has me thinking about shopping around.

Worth talking to Employee Fiduciary or anyone else to shop prices?
Here's my 2 cents on something like this.

Look at EF or some other low fee provider and ask them about the new comp profit sharing process. If not fully satisfied, use EF as the recordkeeper only and hire a qualified TPA to do the new comp testing. May cost you more but they always get it right.

jacoavlu
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Re: Small company 401k plans

Post by jacoavlu » Sun May 13, 2018 8:57 pm

KSActuary wrote:
Sun May 13, 2018 8:52 pm
jacoavlu wrote:
Fri May 11, 2018 7:08 pm
Our small PC plan (4 owners, 1 employee) has I’m guessing $2M in assets. Our goal is to maximize benefit to owners. Basically, we max out and plan testing tells us what to contribute to 1 non HCE.

Guideline only offers comp to comp (pro rata) and equal amount profit sharing which doesn’t fit what we want.

Right now we use a small regional firm and I think we pay about $3k/yr, with self directed brokerage accounts. Service level has declined a bit which has me thinking about shopping around.

Worth talking to Employee Fiduciary or anyone else to shop prices?
Here's my 2 cents on something like this.

Look at EF or some other low fee provider and ask them about the new comp profit sharing process. If not fully satisfied, use EF as the recordkeeper only and hire a qualified TPA to do the new comp testing. May cost you more but they always get it right.
I think “New comparability” is what they’re doing now. I think we’re probably getting a pretty good deal as is. I guess I just need to have a talk with the principals about service expectations.

Edit: I should that I’m the youngest owner and I’m about the same age as our one non HCE.

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JamesSFO
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Re: Small company 401k plans

Post by JamesSFO » Mon May 14, 2018 7:34 am

Spirit Rider wrote:
Sun May 13, 2018 7:15 pm
JamesSFO wrote:
Sat May 12, 2018 10:51 pm
misterno wrote:
Sat May 12, 2018 8:52 pm
Not intending to hijack the thread but can someone recommend me the cheapest TPA and overall service for a sole prop with 2 partners set up as Qualified Joint Venture?

There will only be 2 people who are partners and no employees. I got plenty of time so I would like to do the administrative work myself. So what is the best alternative for me?
If you are both owners an individual or solo 401K might work... Check those threads.
Based on other threads I believe misterno: might be looking for a TPA to provide a custom one-participant 401k plan that supports employee after-tax contributions and in-service rollovers. This feature set is not available from mainstream providers.
Vanguard/Ascensus will do a 401K with "top hat" defined benefit plan which allows even greater contributions than 401K with after-tax+rollover. But it will cost, but so will a custom I401K

ERISA Stone
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Re: Small company 401k plans

Post by ERISA Stone » Mon May 14, 2018 11:07 am

jacoavlu wrote:
Sun May 13, 2018 8:57 pm
KSActuary wrote:
Sun May 13, 2018 8:52 pm
jacoavlu wrote:
Fri May 11, 2018 7:08 pm
Our small PC plan (4 owners, 1 employee) has I’m guessing $2M in assets. Our goal is to maximize benefit to owners. Basically, we max out and plan testing tells us what to contribute to 1 non HCE.

Guideline only offers comp to comp (pro rata) and equal amount profit sharing which doesn’t fit what we want.

Right now we use a small regional firm and I think we pay about $3k/yr, with self directed brokerage accounts. Service level has declined a bit which has me thinking about shopping around.

Worth talking to Employee Fiduciary or anyone else to shop prices?
Here's my 2 cents on something like this.

Look at EF or some other low fee provider and ask them about the new comp profit sharing process. If not fully satisfied, use EF as the recordkeeper only and hire a qualified TPA to do the new comp testing. May cost you more but they always get it right.
I think “New comparability” is what they’re doing now. I think we’re probably getting a pretty good deal as is. I guess I just need to have a talk with the principals about service expectations.

Edit: I should that I’m the youngest owner and I’m about the same age as our one non HCE.
Here are a few situations I had with EF. viewtopic.php?f=2&t=244838&p=3839663#p3839663 I encourage you to read it since you are looking at new comparability formulas. Some other things have happened since that have dropped my confidence level below satisfactory so I will start looking for other TPAs as soon as my 2017 work is finished (EF has had all of the necessary data since January; they offered to expedite for a charge).

JBTX
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Re: Small company 401k plans

Post by JBTX » Mon May 14, 2018 2:24 pm

As a follow up I talked to Employee Fiduciary, Vanguard, and Guideline. I would be comfortable
With any of them.
Last edited by JBTX on Fri Aug 03, 2018 7:19 pm, edited 1 time in total.

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LadyGeek
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Re: Small company 401k plans

Post by LadyGeek » Tue May 22, 2018 8:11 pm

This thread has run its course and is locked. See: Acceptable Topics and Subforum Guidelines
This is an investing and personal finance forum. We also maintain a subforum that allow our members to discuss consumer goods and services and recreational activities. Anything else is considered "Off Topic" and is not acceptable on this forum.
Also: Investing - Help with Personal Investments
This subforum is for all questions about your (or your friend's or family's) actual investments or investment planning.
And: Personal Finance
This subforum is for personal financial issues that don't involve investments.
The OP is asking on behalf of his wife's employer and is for the benefit of this company's employees (vs. the OP or his wife directly). This is outside the scope of this forum's guidelines and is therefore off-topic.

(This thread is now in the Personal Finance (Not Investing) forum (401k).)

Update: See below.
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LadyGeek
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Re: Small company 401k plans

Post by LadyGeek » Tue May 22, 2018 10:03 pm

After receiving a PM, the OP has clarified that his DW is a key employee. The decisions made here will impact her directly.

This thread is now unlocked to continue the discussion.
Wiki To some, the glass is half full. To others, the glass is half empty. To an engineer, it's twice the size it needs to be.

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