The Best Employee Retirement Plans for Small Businesses 2025

Once your business has a team of employees, it’s best to set up an employer-sponsored retirement plan, which can help improve retention rates. Some states even require certain employers to offer 401(k) plans. However, finding the best plan provider and retirement benefits package can become an arduous challenge with so many choices available. When considering your options, look for vendors that offer plan design, administration, recordkeeping, auto-enrollment and easy integration with company payroll.

The best retirement plan providers offer businesses informative dashboards, like this one from ADP. Source: ADP

The following employee retirement plan providers didn’t score as highly in our evaluations as our best picks above. However, they all offer reliable services and an attractive mix of options that could make one of them a better fit for your business’s retirement plan needs.

Vanguard – Best for Investment Flexibility

As one of the oldest and largest mutual fund companies in the world, Vanguard offers a wide range of mutual funds and ETFs for account holders to choose from. The company also offers retirement services, including individual retirement accounts and some small employer-sponsored plans.

Vanguard shines with its massive list of cost-effective investment options. Long considered the king of cheap investing, Vanguard has been helping individuals and small businesses save for retirement for more than 40 years. Of its actively managed funds, 86 percent have outperformed their peers over the past decade. What’s more, Vanguard’s average fund expense ratio is 84 percent lower than the industry average. Another bonus is that the minimum initial investment required to open a small business retirement account is the price of one share.

Fidelity – Best for the Self-Employed

Fidelity is one of the largest privately owned financial services companies worldwide. The firm provides a wide array of services, including individual retirement accounts and employer-sponsored retirement plans. Many of the IRA options, including SEP IRAs, can be opened without an advisor and are a great, cost-efficient option for entrepreneurs. We found that accounts can be set up quickly and easily online.

Fidelity customers get access to a full array of investment options within these retirement accounts, particularly the IRA options. Users can trade U.S. stocks, ETFs and options for zero commission, and there are no annual fees for SEP IRAs. If you’re self-employed and want a retirement account you can set up digitally, Fidelity is a standout provider with a well-deserved excellent reputation.

Guideline – Best for Compliance

Guideline is a relatively new company with a particularly strong safe harbor 401(k) offering. Safe harbor 401(k) plans are great for small business owners because they allow them to maximize their own contributions, even if not all of their employees participate in the plan. Business owners who use a traditional 401(k) instead may be prohibited from maximizing their contributions since the IRS imposes limitations based on employee participation and contribution rates.

Because Guideline is an online option, it’s easy to set up and relatively affordable. The company’s basic plan starts at $49 per month, plus $8 per employee per month. Guideline’s other plans, which offer additional features, cost $79 and $129 per month. Employees are also charged additional account fees, but they are minimal: 0.08 percent annually.

Shelton – Best for Customer Support

Shelton Capital Management differentiates itself in a competitive market by providing its clients with concierge-level customer service and support with all of its 401(k) retirement plans. Shelton’s commitment to service can be seen in other areas, like on-site investment education sessions designed to help boost participation rates. U.S.-based representatives are also available to answer calls from participating employees and provide ongoing support wherever needed.

The company offers 3(38) investment fiduciary services with a focus on supporting small business owners and employees with 401(k) plans. Public pricing isn’t available for Shelton’s 401(k) plans, but ongoing costs typically include investment fees, often as a percentage of total assets. Other expenses include administration fees and individual service fees.

Perfect401k – Best for Easy Implementation

Perfect401K offers one of the easiest implementation processes we’ve seen. If you want to attract top talent with a competitive benefits package but you’re intimidated by the thought of implementing a retirement plan, Perfect401(k) may be the best fit. The company makes it simple for business owners to set up a retirement plan for their employees by assigning each business a designated implementation team that handles the plan design, enrollment and training.

The Perfect401(k) plan costs employers $375 per quarter ($1,500 annually) for 10 employees, plus $7.25 per additional employee each quarter, which is steeper than some competitors. Employees are charged 0.67 percent or less of their account balance each month to cover the cost of mutual funds, investment consultation, educational tools and other management fees.

Business owners can expect to pay $30 to $300 or more per month for their employee retirement plans, plus $4 to $15 per employee per month to cover the cost of administration and recordkeeping. Self-employed plans are typically cheaper, while employer-sponsored plans can vary in price based on the number of employees and package features.

Beyond assessing the monthly base costs, understanding the complete fee structure is crucial when evaluating retirement plan providers. Employee retirement plans involve several types of fees that can significantly impact both employer costs and employee returns over time.

Plan Administration Fees

Plan administration fees cover the basic operations of running the retirement plan, including recordkeeping, compliance testing and participant communications. They’re typically charged as either a flat annual fee per participant (for example, $20-$100) or an asset-based percentage (0.10-0.50 percent of plan assets).

Investment Management Fees

Each investment option within the plan incurs an expense ratio, usually ranging from 0.05 percent to 2.00 percent annually. Passively managed index funds tend to have the lowest fees (0.03-0.20 percent), while actively managed funds and specialty investments cost more (0.50-2.00 percent). These fees are automatically deducted from investment returns.

Individual Service Fees

Providers may charge participants for specific services like loan origination fees ($25-75), loan maintenance fees ($25-50 annually), hardship withdrawal processing ($50-100) or in-service distribution fees ($25-50). Some also charge quarterly account maintenance fees ($5-15).

Advisory Fees

If the vendor offers a financial advisor or consultant, these fees typically range from 0.25 percent to 1 percent of plan assets annually. Sometimes, the employer pays these, and other times, they’re passed through to the employees.

Insurance and Compliance Costs

Fiduciary insurance, audit fees for larger plans and Pension Benefit Guaranty Corporation premiums (for defined benefit plans) add to overall costs. These are usually absorbed by the employer, but can affect plan generosity.

Third-Party Service Fees

Some providers charge for services like financial planning consultations, managed account services (typically 0.30-0.60 percent annually) or automatic rebalancing features.

The figures above are general estimates based on common fee ranges. Providers often don’t publish specific fee amounts publicly because costs vary significantly based on plan size, number of participants, asset levels and service complexity. Larger plans with more participants typically receive better pricing because vendors tend to offer discounts for bigger groups. Many fees are also embedded within investment products through expense ratios or revenue-sharing arrangements, making them less transparent to plan sponsors and participants.

That said, the total annual cost for participants typically ranges from 0.50 percent to 2.50 percent of assets, with well-managed plans keeping total fees under 1 percent. Employers should regularly benchmark their plan’s fees against similar plans to ensure they’re reasonable and in participants’ best interests. Business owners should also keep their own financial future in mind as they prepare for retirement.

Small businesses have several retirement plan options to choose from, each with distinct features, contribution limits and administrative requirements. Understanding these plan types helps employers select the most appropriate option for their workforce and business size.

Traditional 401(k) plans: These are the most common employer-sponsored retirement plans, offering employees the ability to contribute pre-tax dollars through salary deferrals. According to the Internal Revenue Service (IRS), employees can contribute up to $23,500 in 2025, with an additional $7,500 catch-up contribution for those aged 50 and older; contributions for the next plan year are typically announced the prior fall. These plans require annual nondiscrimination testing to ensure highly compensated employees don’t receive disproportionate benefits.

Safe Harbor 401(k) plans: These function similarly to traditional 401(k) plans but include mandatory employer contributions that are immediately vested. The IRS notes these plans are exempt from annual nondiscrimination testing because the required employer contributions ensure fair treatment of all employees. Employers must provide either matching contributions up to 3 percent of employee compensation or non-elective contributions of 2 percent for all eligible employees.

SIMPLE IRA plans: Savings Incentive Match Plans for Employees are designed specifically for small businesses with 100 or fewer employees. These plans allow employee salary deferral contributions of up to $16,500 in 2025, with a $3,500 catch-up contribution for those aged 50 and older, according to IRS guidelines. Like with the Safe Harbor plan, employers must provide either matching contributions up to 3 percent of employee compensation or non-elective contributions of 2 percent for all eligible employees.

SEP IRA plans: Simplified Employee Pension IRAs allow only employer contributions, making them ideal for self-employed individuals or small businesses with few employees. The IRS permits contributions of up to 25 percent of employee compensation or $70,000 in 2025, whichever is less. All eligible employees must receive the same contribution percentage.

403(b) plans: These are tax-sheltered annuity plans available to employees of public schools, certain nonprofits and religious organizations. They have the same employee contribution limits as 401(k) plans.

Solo 401(k) plans: Also called individual 401(k) or one-participant 401(k), these are designed for self-employed individuals or business owners with no employees other than a spouse. These plans allow the solopreneur to make both employee and employer contributions, enabling higher total contribution limits of up to $70,000 in 2025, or $77,500 for those aged 50 and older, per the IRS.

Employee retirement benefits providers offer many common features. Most packages include certain core services, such as plan administration, recordkeeping and preparation of IRS filings. Some vendors also handle plan design (investment selection) and employee enrollment, serve as a plan fiduciary and sometimes even manage company payroll.

Here are the employee retirement plan functions we recommend paying close attention to:

Onboarding Support

Quality retirement benefits providers offer comprehensive employee education programs that include live enrollment meetings, interactive webinars and on-demand video libraries covering contribution strategies, investment basics and tax implications. The best onboarding programs use real-world scenarios to demonstrate concepts like compound interest and employer matching, making complex financial topics accessible to team members with varying levels of financial literacy.

Effective onboarding also includes follow-up communications and refresher sessions, since financial education is most effective when reinforced over time. Look for vendors that offer multilingual resources and personalized coaching sessions for employees who need additional support during the enrollment process.

Most retirement plan providers make it easy for administrators to see who’s enrolled and who’s waiting for any approvals. Source: ADP

Easy Online Administration

Modern retirement plan administration should be completely digital, allowing plan sponsors to manage every aspect of their plan through intuitive web-based dashboards with real-time visibility into participation rates, compliance testing results and plan metrics. The best platforms enable automated workflows for common tasks like processing new hires and salary changes, with built-in validation rules to catch errors before they become compliance issues.

Advanced features include customizable reporting with scheduled delivery, integrated document management and automation that guides administrators through complex processes like annual testing. High-quality solutions offer single sign-on integration with your existing HR systems and role-based access controls to ensure security while maintaining ease of use.

Recordkeeping and Compliance

Comprehensive compliance management for retirement benefits includes proactive monitoring and automated safeguards that prevent issues before they occur. This involves maintaining detailed audit trails for all transactions and automating required participant notices and disclosures. Leading providers handle complex requirements, including annual discrimination testing, top-heavy testing and coverage testing, with automated correction procedures when issues arise. They manage Form 5500 preparation and filing, coordinate required plan audits for larger plans and retain comprehensive documentation to support regulatory examinations.

The best vendors also offer compliance calendars with automated reminders, stay current with changing regulations and provide consultation on plan design changes needed to maintain compliance.

Investment Selection

Professional investment oversight involves thorough due diligence to evaluate fund performance, management quality and expense ratios across multiple market cycles. Quality retirement benefits providers maintain diversified investment lineups covering all major asset classes while avoiding overlap and ensuring appropriate risk profiles for different participant demographics. They should offer both actively managed and passive index options, with a clear preference for low-cost investments that minimize participant fees.

Investment committees should meet regularly to review performance, monitor style drift and replace underperforming funds according to documented investment policies. Plans often include target-date funds and risk-based model portfolios as default options.

Consider the types of funds you and your employees would like available for investing, such as these from ShareBuilder 401k, before choosing a retirement plan provider. Source: ShareBuilder401k

Mobile Enrollment

Mobile accessibility has become essential as employees increasingly expect to manage their financial lives through smartphones and tablets. Quality mobile retirement plan platforms should offer full functionality, including tools for initial enrollment, contribution rate adjustments, investment allocation changes, and loan or distribution requests — not just basic account viewing.

The best mobile experiences use responsive designs with intuitive navigation that make complex financial concepts accessible to users with varying technical skills. Advanced mobile features include biometric authentication for security, push notifications for important plan updates and mobile-optimized educational content, including interactive calculators and short video tutorials.

Employee Resources

Comprehensive participant support should include multiple communication channels, such as dedicated toll-free numbers to connect with knowledgeable plan representatives, secure messaging systems and live chat functionality during business hours. Quality providers offer financial wellness assessments that help employees understand their retirement readiness, along with actionable recommendations for improvement.

Advanced support includes one-on-one financial coaching sessions and extensive online resource libraries with articles, calculators and tools covering topics like debt management and emergency savings. Some leading vendors also partner with financial wellness companies to offer guidance beyond retirement, including student loan assistance and budgeting tools that help employees improve their overall financial stability.

Artificial Intelligence Tools

AI-backed retirement planning tools use advanced algorithms to analyze individual participant data, including age, salary, current savings and risk tolerance, to provide personalized recommendations for contribution rates and investment allocations. These systems continuously monitor market conditions and participant circumstances to suggest portfolio rebalancing and contribution adjustments that keep employees on track toward their retirement goals.

Modern AI-powered advisors integrate with broader financial wellness platforms to provide holistic guidance considering employees’ complete financial picture, including debt obligations and emergency savings. The best vendors also use predictive analytics to identify participants at risk of inadequate retirement savings and provide proactive outreach with specific, actionable recommendations. AI-driven chatbots offer instant answers to complex questions about plan features and investment options.

Retirement benefits can be a big draw for employees. Fortunately, anyone can set up a retirement plan for their small business, but using an independent, reputable provider can help you compete with the benefits packages and resources of larger companies. Here are a few advantages of using a professional provider to administer your employee retirement plans:

• Helps attract and retain talent: Today’s job market is competitive, especially for small business owners looking for workers. Many industries have faced labor shortages, and the cost of training and onboarding new employees is prohibitive for many companies. Business owners can use a solid retirement plan as a tool for recruitment and retention. According to Gusto, 40 percent of employees are less likely to leave a job in the first year if it offers retirement benefits. The HR services provider also found that the costs of providing a retirement plan are much cheaper than the costs of employee turnover.
• Improves productivity: Your HR manager will be a lot more productive (as will your employees) if everyone’s retirement benefits are handled centrally by a professional provider. These vendors can ensure employees have easy access to their retirement accounts and are regularly available to answer questions, freeing HR staff to work on other essential tasks.
• Saves time: Retirement plan providers offer platforms that make plan administration and recordkeeping totally seamless and largely automated. The software automatically handles complex calculations like contribution limits, vesting schedules and required distributions. This eliminates the need for manual spreadsheets and reduces the risk of costly compliance errors. It also allows HR teams and business owners to focus on core business activities rather than wrestling with retirement plan paperwork. What once required hours of manual work each payroll cycle now happens automatically in the background.
• Reduces the pressure of compliance requirements. The professionals working with retirement service companies are current on the regulations and familiar with best practices. This expertise protects your business from potential penalties and ensures you’re always meeting the latest IRS and Department of Labor requirements. You’ll have peace of mind knowing that your retirement plan won’t expose your company to legal risks or costly violations.

Selecting an employee retirement benefits provider takes some research and careful consideration of your company’s needs. Even after settling on a vendor, you should reassess the partnership periodically to ensure the plan offerings remain sufficient for your team.

Follow these steps to choose the right retirement plan provider for your business:

1. Determine your needs.

Before researching providers, assess your company’s specific retirement plan needs and goals. Consider factors like your current number of employees, anticipated growth and budget for both setup costs and ongoing administrative expenses. Determine what level of employer matching or contributions you want to offer, and decide whether features like automatic enrollment, loans or profit-sharing align with your company culture and financial objectives.

Having a clear understanding of these requirements will help you narrow down providers and avoid paying for unnecessary features or services. Identify retirement benefits vendors that specialize in companies of your size, as small business needs differ significantly from those of large corporations.

2. Check out reviews.

Seek providers with strong reputations, positive client reviews and a track record of reliable service in the retirement plan industry. When reading user testimonials, look for red flags. Pay close attention to the quality of customer service customers have received, the problems they’ve encountered and the usability of the vendor’s platform. Keep in mind that past performance does not guarantee future results.

3. Evaluate the investment selections.

Look closely at each provider’s investment menu, as this directly impacts your employees’ ability to build retirement wealth. The best vendors offer a diverse selection of low-cost index funds, target-date funds and actively managed options that cover different asset classes and risk levels. Ensure the lineup includes simple, well-diversified options for employees who prefer a hands-off approach, as well as more sophisticated choices for those who want greater control over their portfolios.

4. Analyze the costs and fees.

In addition to monthly base plan costs, ETFs and mutual funds incur fees, also known as expense ratios, to cover the cost of operating the fund. Analyze these ratios, as high fees can significantly erode returns over time. Quality vendors typically offer funds with expense ratios below 1 percent. Even slight differences in expense ratios can significantly affect the final value of an employee’s retirement fund over time.

Also study other add-on costs, such as administration fees, compliance costs and advisory expenses. Assess whether all of these costs fit into your budget and what’s reasonable for your team members to pay.

5. Select the vendor that best suits your needs.

After thoroughly evaluating all factors, select the provider that best balances cost, service quality and investment options for your organization’s specific needs. Once you’ve made your choice, work closely with the vendor to set up the plan documents, establish the investment lineup and integrate payroll systems.

Prepare to communicate the new benefit to your employees through informational meetings or materials that explain how the plan works and encourage participation. Finally, establish a timeline for launching the plan and ensure all legal requirements are met before the effective date.

Retirement plan requirements vary significantly by state, with many states now mandating that employers offer retirement savings options to their employees. Understanding your state’s specific legal requirements is crucial for compliance and avoiding potential penalties.

For example, several states have implemented mandatory retirement savings programs that require employers to either offer a qualified private retirement plan or enroll employees in a state-sponsored program. States with active programs include California, Colorado, Connecticut, Delaware, Illinois, Maine, Maryland, Massachusetts, Nevada, New Jersey, Oregon, Vermont and Virginia, with additional states like New York and Washington set to implement programs in the coming years.

California’s CalSavers program requires employers with one or more employees to participate if they don’t already offer a retirement plan. The CalSavers website indicates that affected businesses must register by year’s end or face potential penalties. Oregon’s OregonSaves program applies to all employers with one or more employees, while Connecticut’s MyCTSavings program affects businesses with five or more employees.

Penalties for non-compliance vary by state but can be substantial. For example, Oregon employers could face penalties of $100 per employee (up to $5,000 maximum per year) for non-compliance, while Illinois imposes fines of $250 per employee in the first year, escalating to $500 per employee in subsequent years.

Given the complexity and evolving nature of state retirement plan requirements, business owners should consult with legal and tax professionals to ensure compliance with regulations in their specific state. Requirements can change frequently, and penalties for non-compliance can impact business operations and finances.

At Business News Daily, our team of small business experts has been researching employee retirement plans for years, comparing some of the leading solutions across more than 30 key metrics. We considered 23 employee retirement providers and closely reviewed and tested the services of 10 of them before selecting our five best picks above.

To narrow down our list, we began by investigating provider reputations, plan offerings and customer testimonials. We sought vendors that offered a variety of plan types, with robust packages that included modern digital platforms for account management. We compared fee structures and whether companies provided useful tools, like mobile apps and retirement wealth calculators. We also considered whether the providers could administer other HR services, such as payroll and insurance benefits. We tested sign-up processes and software to understand the user experience thoroughly.

Below are the factors we considered when determining our best picks. Each is weighted according to how much the criteria typically influences business owners’ buying decisions.

Pricing (30%): We considered not just the monthly base cost of each vendor’s employee retirement plans but also per-employee charges, plan administration fees, costs to employees and the number of plans available to choose from.

Enrollment and Onboarding (25%): We evaluated how easy it was to enroll in an employee retirement plan and whether a company offered online and mobile enrollment options. We also considered how much support each company offered when onboarding employees to their program, including a detailed explanation of benefits.

Usability (25%): We paid close attention to the ease with which employees could review their plans and manage funds online. We tested each company’s benefits dashboard and tools, such as fund rebalancing.

Customer Support (20%): We examined how easily customers could contact the support team for help. We also considered whether companies gave employees the option to work with financial advisors for retirement guidance.

In addition to scoring each employee retirement plan provider we reviewed based on this criteria, we also determined the best use case scenarios for each. No two businesses are exactly alike, so we put ourselves in the shoes of different types of small business owners to identify the best retirement benefits options for a variety of needs.

To learn more about how we review and test financial products and services for small businesses, read about our editorial process.

Jeff Hale and Dock Treece contributed to this article.