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Paychex Employee Retirement Review

Dock David Treece
Dock David Treece
  • Paychex plans offer administration, recordkeeping, payroll or a combination of the three.
  • Business owners still need to work with an advisor for plan design.
  • In addition to 401(k) plans, Paychex offers IRA and 403(b) options.
  • This review is for small business owners and HR professionals who are considering Paychex as their employee retirement plan provider. 

Many small business owners want to keep critical HR functions under the same roof. Larger, established companies have the resources to completely remove the administrative burden from an employer. Paychex is an HR, payroll and employee benefits provider that also offers integration with 401(k) plans. Using Paychex, business owners can choose their own 401(k) plan, IRA, 403(b) and investment options to offer employees. Business owners can also work with their preferred financial advisor on plan design. Paychex makes it easy to set up your plan and integrate with automated payroll to handle employee enrollment and contributions.

Paychex Employee Retirement

Paychex Employee Retirement

The Verdict

Paychex is a top choice for those who want to manage all their HR needs on one platform. It offers several employee retirement plans, dedicated support, and integrations with payroll and other HR functions, earning our pick for best all-in-one service.

Paychex Editor's Score: 93/100 

Transparent pricing  87/100
Low employee investment fees 90/100
Mobile and online access 100/100
No fees for sign-up and administration  90/100
Variety of plans 100/100

Why Paychex Is the Best All-in-One Solution

Paychex is a great all-in-one solution because the company offers HR, payroll and employee benefits, in addition to retirement account administration and recordkeeping. The company provides a full menu of options, so you can choose which Paychex features you'd like.

Pros

  • Business owners can manage their HR, payroll and employee retirement benefits in one platform.
  • Paychex lets business owners tailor a retirement plan to their company's unique needs.
  • It offers user-friendly online and mobile app-based tools.

Cons

  • Retirement benefit management is not Paychex's core competency.
  • Paychex reps offer limited guidance on 401(k) plans and retirement planning.
  • Retirement plan services are available only to businesses that also use Paychex's payroll services.

Plans

Unlike some top employee retirement providers, Paychex does not offer individual plans. Instead, employers can build a 401(k) plan that includes recordkeeping, administration or plan design – or any combination of those features – including recordkeeper-only services and stand-alone third-party administration. 

Paychex users can also bundle health benefits, payroll and HR services, as well as outsource services to a full-service professional employer organization (PEO). Notably, however, businesses that do not use Paychex's payroll services are not eligible for the company's retirement services. 

Did you know?Did you know? Offering your employees retirement benefits like a 401(k) helps your small business as well.

Additional Features

  • Onboarding: In addition to helping employers choose investment options and customize plan parameters, Paychex can work with your current HR and benefits provider to transition to the new platform and plan. This involves managing and completing the necessary documents, setting up payroll and re-enrolling participating employees.

  • Bundled recordkeeping and payroll integration: Employers can use Paychex to handle all aspects of their retirement plan's administration and recordkeeping. Paychex also offers recordkeeper-only services for employers that prefer more basic features.

  • Easy enrollment: Employee enrollment can be completed via mobile apps or automatically. Employees can also use the app to check retirement contribution amounts, rebalance their accounts and review investment performance.

  • Employee resources: In addition to chatting with a representative through their Paychex Flex accounts, employees can take advantage of Paychex's FAQs page. However, these online resources are more limited than those offered by dedicated retirement providers, and representatives cannot provide investment-specific guidance. 

Account Types

Paychex customers can choose from several types of retirement plans, including traditional 401(k) plans, 403(b) plans, SIMPLE IRAs and even pooled employer plans (PEPs). Each of these plans has its own rules and regulations, as determined by the IRS.

  • PEPs: PEPs are a new type of plan that allows employers to pool multiple retirement plans into a single 401(k).

  • Traditional 401(k): Companies can design their own plan with a financial advisor and decide on their match.

  • Owner-only 401(k): Owner-only plans allow entrepreneurs to maximize their tax-deferred savings.

  • Solo 401(k): A solo 401(k) is like an owner-only 401(k), but many also include a checkbook option that allows account holders to invest in alternative assets.

  • SIMPLE IRA: A SIMPLE IRA is like a basic, easy-to-manage 401(k) that can be a good cost-effective alternative for businesses with fewer than two dozen employees.

  • 403(b): A 403(b) is like a 401(k) for churches, charities and government agencies. 

Investment Options

Employers that use Paychex to provide employee retirement benefits get access to thousands of investment options. However, these investments depend on the offerings of individual financial advisors and are, therefore, not described on the Paychex website. 

And while the Paychex platform makes it easy for employees to select their allocations to change investments – because most Paychex plans are designed by financial advisors – it's unclear how flexible Paychex is in including investments such as individual securities or stock in private companies.

Pricing

Like many top employee retirement providers, Paychex does not publish its retirement benefit pricing on its website. Instead, pricing depends on a business's customized retirement plan and the other Paychex services the business uses. If your business already uses Paychex to process payroll, contact your account representative to get a quote for retirement services. You can also get a quote by submitting a request through the website or by using the online chat option. Alternatively, you can contact the Paychex sales team via telephone. 

Ease of Use

Paychex's full sign-up and onboarding processes are not detailed online, but employers can sign up by contacting the sales team by phone or the website. The type of services an employer chooses from Paychex also determines the platform's overall ease of use. Business owners who opt for comprehensive recordkeeping and administration will experience more streamlined onboarding and long-term plan administration. 

Customer Service

Employers can contact Paychex about retirement services by phone Monday through Friday, from 8 a.m. to 8 p.m. ET. Users can also email the support team, access their Paychex Flex account online or chat live with a representative. Employees who need help with retirement services can view a selection of frequently asked questions online, or access their Paychex Flex account and chat live with a representative.

In spite of these resources, some current Paychex users report a lack of coordination between support representatives in different service areas. 

Drawbacks

Paychex does have some drawbacks when it comes to retirement benefits. First, Paychex is primarily a payroll company, so retirement benefits are not the company's core competency. This may make it difficult to resolve issues, if you don't have a dedicated rep to help with your retirement account. Also, you have to be a Paychex payroll customer to be eligible for the company's retirement services.

TipTip: Looking for a dedicated employee retirement benefits provider? Consider our review of American 401k, our Human Interest review or our ShareBuilder 401k review.

What Is an Employee Retirement Benefits Provider?

An employee retirement benefits provider is a company that helps small business owners set up and administer retirement plans for themselves and/or their employees. Companies offer various types of plans, investment options, features and services depending on the role they play in the plan creation and administration process. Some providers also offer features such as payroll administration to make it cheap and easy for participants to contribute to their accounts.

FAQs

Is Paychex a good company?

Paychex is a very large and reputable company. It's also a great provider of 401(k) plans, especially if you also need payroll and HR services or if you have a financial advisor you want to work with on the plan's design.

Is Paychex safe to use?

Paychex is absolutely safe to use. It's a very large, reputable, secure company. It has robust security policies and handles payroll for many large companies.

Which is better: ADP or Paychex?

Both ADP and Paychex are very large companies that focus primarily on providing payroll services, but both also offer employee retirement benefits. Each company has strengths and weaknesses, and which one is better depends largely on the needs of your small business. Read our ADP retirement plan review to learn more about its retirement service. 

Bottom Line

We recommend Paychex for ...

  • Businesses that already use Paychex to manage their HR and payroll needs.
  • Small and midsize businesses that want to outsource HR, payroll and employee retirement benefits.
  • Businesses that want to offer pooled employer plans.

We don't recommend Paychex for ...

  • Businesses that do not already use Paychex's payroll and HR services.
  • Business owners who want an account manager with expertise in retirement planning and investments.
  • Large organizations that need robust employee retirement options.

Image Credit: Getty Images
Paychex Employee Retirement

Paychex Employee Retirement

The Verdict

Paychex is a top choice for those who want to manage all their HR needs on one platform. It offers several employee retirement plans, dedicated support, and integrations with payroll and other HR functions, earning our pick for best all-in-one service.

Dock David Treece
Dock David Treece
Business News Daily Contributing Writer
Dock David Treece is a contributor who has written extensively about business finance, including SBA loans and alternative lending. He previously worked as a financial advisor and registered investment advisor, as well as served on the FINRA Small Firm Advisory Board. He previously held FINRA Series 7, 24, 27, and 66 licenses.