Choosing Your Business’ Retirement Plan Provider
As businesses grow and compete for employees, one of the most popular benefits they may choose to offer is a qualified retirement plan such as a 401(k). But while such plans are sometimes viewed as a commodity, employers actually have many decisions to make when designing a retirement plan and the right retirement provider can help.
Designing a unique retirement plan can both serve the needs of employees and help the employer stand out in a competitive job market. Choosing the right retirement plan provider is the first step in the process. The right provider can make the difference between a plan that causes headaches and a plan that makes you a hero. Here are five things to know and evaluate when comparing potential providers.
Understand Exactly What Providers Provide
For businesses new to offering retirement benefits, the service can seem opaque. It helps to understand the five different roles of a retirement plan provider: Administration and compliance (making sure the plan abides by IRS rules); recordkeeping (managing trades and distributions); investments (the provider of the actual investment products offered to members); communications (notifying members and employers alike); and plan design (the features and provisions that make up the plan). Importantly, one provider can off er all of these, or a sponsor can mix and match.
Look for a Provider Who Consults Instead of Sells
As you consider what retirement benefits to offer your employees, you have a surprising amount of flexibility in your plan design to achieve your goals. Do you want to auto-enroll employees? Would you like to match a portion of your employees’ contribution? What investments do you want to make available? Each of these will have an impact on the simplicity, flexibility, and attractiveness of your offering. Look for a provider who will take the time to consult with you, ask about your goals, and explain the implications of choices until you have your ideal solution.
Look for the Best User Experience
You may offer the most generous, flexible retirement benefit, but if it’s confusing or complicated to enroll or make changes, your employees won’t use it to its fullest. A simple, intuitive experience is key to the success of a program. Today, people expect access to a personalized online portal, ideally accessible via a secure app. The sponsor experience should also be considered – you don’t want a plan to create extra work or hoops to jump through.
Consider the Full Value of a Provider
Comparing costs isn’t always apples to apples. Some providers may appear less costly but may require the use of more expensive, proprietary investments in limited products. Others may offer a stripped-down user experience, lack robust education, or offer reduced sponsor service compared to others. Consider the full value of what you get. Alerus has an open architecture platform. Meaning you have access to all qualified investments, regardless of provider – and flexible levels of service to deliver the value you need.
Approach Retirement as Part of a Holistic View
If your goal is to help employees prepare for their future, consider providers who will look beyond retirement. A holistic provider will provide other consultative services to employees, helping them ensure they have emergency savings and balance other financial needs with their retirement plan to set them up for overall financial wellness success.
Whether you are new to offering retirement benefits or considering a new provider, look for a partner with a long history who has invested in its service offerings. Alerus has been helping firms with retirement since 1944 and invests in the technology and tools needed to provide the best service possible for plan sponsors and their employees. Talk to your Alerus representative about how we can help you offer a retirement benefit that fits your needs.