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Whether you're looking into an employee retirement plan for your small business because you want to enhance your benefits package to attract or keep skilled employees, get ahead of impending state legislation requiring you to either sponsor a plan or register with the state, or for tax reasons suggested by your CPA or other financial advisors, there are multiple advantages.
Selecting the type of plan that's the best fit for you and your business is the first step. You have a variety of options to choose from, but some of the most popular types of employee retirement plans are traditional and Safe Harbor 401(k)s, Simplified Employee Pension Plan (SEP) IRAs and Savings Incentive Match Plan for Employees (SIMPLE) IRAs. If you're a sole proprietor, options include a solo 401(k) or a traditional or Roth IRA. For detailed information on these retirement plan types, check out our guide to small business retirement plan types.
After you've identified the type of plan you're interested in learning more about, it's time to look at plan providers. Many different companies offer employee retirement plans, but not every provider works with small businesses or has plans that are affordable for this market. Some only work with large businesses or those that have millions of dollars in assets. Others are expensive to set up and maintain, and some require you to work with several companies to keep you in compliance with Department of Labor regulations.
To help you find the best employee retirement plan companies, we looked for companies with the following qualities.
To determine the retirement services we think are best for small businesses in 2019, we spent dozens of hours researching the top providers. Here is an explanation of our selection process.
Our search for the best retirement plans began by asking small business owners which plan providers they work with and would recommend. To this list, we added providers we were already familiar with and those we found in our research and from reputable online sources. This brought our list to nearly two dozen retirement plan providers.
We then narrowed our list. We removed retirement plan providers that don't work with small businesses, are regional or offer limited services. We also eliminated companies that don't post their pricing on their websites, as it's inconvenient for a small business owner to have to call the company just to find out if the plans offered are within their budget.
With 10 retirement providers left on our list, we researched each company's offerings, prices, fees and terms. We examined the resources on their websites, such as knowledgebases, FAQs, and blogs, and looked up their Better Business Bureau ratings and complaints. We then called the companies posing as potential clients and asked questions about how the plans work, what it takes to set them up, and details about costs.
In our evaluation, cost, convenience and customer service were the factors that received the most weight in our scoring. We looked for plans with competitive pricing for both you as the plan sponsor and for your employees as plan participants. Where applicable, we also looked for all-inclusive providers that reduce your fiduciary burden and eliminate the need to hire multiple companies to serve your plan. Finally, we favored companies with patient representatives who took the time to explain how different plans work and sought to recommend the one best for the business we described in our testing scenario.
