Business News Daily receives compensation from some of the companies listed on this page. Editorial Guidelines.
BND Hamburger Icon

MENU

Close
BND Logo
Search Icon
Advertising Disclosure
Close
Advertising Disclosure

Business News Daily provides resources, advice and product reviews to drive business growth. Our mission is to equip business owners with the knowledge and confidence to make informed decisions. As part of that, we recommend products and services for their success.

We collaborate with business-to-business vendors, connecting them with potential buyers. In some cases, we earn commissions when sales are made through our referrals. These financial relationships support our content but do not dictate our recommendations. Our editorial team independently evaluates products based on thousands of hours of research. We are committed to providing trustworthy advice for businesses. Learn more about our full process and see who our partners are here.

Updated May 15, 2024

The Best Employee Retirement Plans for Small Businesses 2024

ADP is a popular retirement plan provider, but you should also consider Paychex, USA 401K and other top companies.

author image
Max Freedman, Business Operations Insider and Senior Analyst
Verified Check With BorderEditor Reviewed
Verified Check With Border
Editor Reviewed
Close
This guide was reviewed by a Business News Daily editor to ensure it provides comprehensive and accurate information to aid your buying decision.
Best for Affordability
Human Interest Employee Retirement
Human Interest company logo
  • Coverage of certain mandatory fees
  • Three levels of service
  • Payroll integration
USALinks to Human Interest Employee Retirement
Visit Site
  • Coverage of certain mandatory fees
  • Three levels of service
  • Payroll integration
Best All-in-One Solution
Paychex Employee Retirement
Paychex company logo
  • Support for admin and payroll
  • Customizable retirement plans
  • IRA options
USALinks to Paychex Employee Retirement
Visit Site
  • Support for admin and payroll
  • Customizable retirement plans
  • IRA options
Best for Transparency
USA 401K
USA 401K logo
  • Clear pricing and fee details
  • Diverse fund offerings
  • Unlimited number of employees
  • Clear pricing and fee details
  • Diverse fund offerings
  • Unlimited number of employees
Best for Small Businesses
ADP Employee Retirement
ADP company logo
  • Payroll integration
  • Mobile enrollment
  • All-in-one solution
  • Payroll integration
  • Mobile enrollment
  • All-in-one solution
Best for Low Fees
ShareBuilder 401k
Sharebuilder 401k company logo
  • Total investment fees under 1%
  • Payroll integration
  • Solo 401(k) plans
  • Total investment fees under 1%
  • Payroll integration
  • Solo 401(k) plans

Table of Contents

Open row

Business News Daily’s team of analysts is committed to independently reviewing business services. The in-depth review process begins with market research and vendor demonstrations before moving on to hands-on testing and service comparisons. To ensure each evaluation is free of errors and bias, a top editor verifies the assessments before publication.

When it comes to the best employee retirement plans, we sought providers that offered a variety of plan types (401(k), Roth, IRA, etc.), low investment fees and transparent pricing. We considered the extent to which plans could be customized by both the employer and employee, and tested plan management self-service portals to get a sense of their user-friendliness. We also looked into whether the vendor’s plan administration system integrated with leading HR and payroll software. Learn more about our methodology.

Once your business has a team of employees, it’s best to set up an employer-sponsored retirement plan, which can help improve employee retention rates. Some states even require certain types of employers to offer 401(k) plans. To find the best employee retirement benefits providers for your business, look for vendors that offer plan design, administration, recordkeeping, auto-enrollment and easy integration with company payroll.

 

Compare Our Best Picks

BND Ribbon
Our Top Picks for 2024
Human Interest Employee Retirement
Paychex Employee Retirement
USA 401K
ADP Employee Retirement
ShareBuilder 401k
Perfect401(k)
Fidelity Investments
Guideline
Vanguard
Rating9.6/109.2/108.7/109.1/108.7/109.0/109.2/109.0/109.1/10
Best use case

Best for affordability

Best all-in-one solution

Best for transparency

Best for small businesses

Best for low fees

Best for easy implementation

Best for self-employed

Best for compliance

Best for investment flexibility

Monthly pricing

Starting at $120 per month, plus $4 per employee;

one-time $499 setup fee

Not disclosed online

$250 one-time installation fee;

$500 annual fee;

$20 per participating employee

401k Essentials: $150 per months plus $4 per participant per month

SIMPLE IRA administration starts at $480 per month

Pricing for other plans not disclosed online

Starting at $25 per month for solo 401(k)

Starting at $375 per quarter for 10 employees, plus $7.25 per quarter for each additional employee

No setup fee, no account maintenance fee, no withdrawal fee, no account minimum

Starting at $49 per month plus $8 per employee

$20-$25 account fee for certain accounts or certain balances, fund expenses;

403(b) plan participants pay $5 per month

Add-on fees

0.5% per year, plus 0.07% in average fund fees

Not disclosed online

No 12b-1 fees, exchange fees, or minimum balance fees

401k Essentials: 0.10% of eligible assets as annual investment management fee, minimum $20.83 per month

Fees for other plans not disclosed online

0.75% for plans with 11-25 participants and less than $500,000 in assets

Not disclosed online

Commissions on trades in certain securities

0.08% per year for participants

Not disclosed online

Types of plans

Traditional 401(k)

Roth 401(k)

Safe harbor

401(k)

403(b)

Traditional 401(k) Owner-only 401(k)

Solo 401(k) SIMPLE IRA

Safe harbor

401(k)

Traditional 401(k)

401(k) SIMPLE IRA SEP IRA

Solo 401(k)

Safe harbor 401(k)

Traditional 401(k)

Tiered profit-sharing 401(k)

Traditional 401(k)

401(k)

Self-employed 401(k)

SEP IRA

SIMPLE IRA

Safe harbor 401(k)

401(k)

Individual 401(k)

403(b)

SEP IRA

SIMPLE IRA

Ease of use

Integrated plan administration and payroll

Option of comprehensive recordkeeping and administration

Concierge-level service

Easy enrollment via mobile app

Fully administered plans with payroll integration and bundled recordkeeping

Plan design, enrollment materials, help with rollovers, participant education

Phone support, account forms online, contributions by phone or mail

Plan design, plan fiduciary, employer and employee dashboards, payroll integration

Online setup for IRA options, recordkeeping included

Online and mobile enrollment

Both

Both

Online only

Both

Online only

Online only

Both

Online only

Both

Acts as fiduciary

Yes

Yes

Yes

Yes

Yes

Yes

Yes

Yes

Yes

Review Link
Scroll Table

Our Reviews

Human Interest company logo
  • Monthly rates start at just $120 per month, plus $4 per employee per month.
  • Human Interest covers certain fees that all other vendors charge.
  • The one-time setup fee is high.
Editor's Rating: 9.6/10
Visit Site

Human Interest is a dedicated employee retirement benefits provider that offers cost-effective and user-friendly services online. Fully automated plans – complete with full recordkeeping, administration and payroll integration – start at $120 per month, plus $4 per employee per month. Employers can choose from three plans – Essentials, Complete and Concierge – each with increasing levels of management.

Beyond the payroll integration and automated administration available through the Essentials plan, Complete provides administration, tax support and 3(16) fiduciary services. The Concierge plan includes all of these features, as well as access to dedicated account management. Human Interest also offers a wide range of investment options, including stock, bond and international mutual funds, as well as real estate funds and an FDIC-insured cash deposit account.

Paychex company logo
  • Paychex offers a full suite of payroll and HR tools, including 401(k) plans and retirement services.
  • Customers get a dedicated support team during onboarding.
  • The company does not disclose its fees and pricing online.
Editor's Rating: 9.2/10
Visit Site

Paychex is an all-in-one HR, payroll and benefits solution that offers 401(k) and retirement services for businesses of all sizes. Small business owners can work with Paychex to build a customized retirement plan, including a traditional 401(k), an owner-only 401(k), a solo 401(k) for sole proprietors and SIMPLE IRA plans. Paychex helps small business owners simplify plan management, reduce the risk of reporting errors and save time for HR professionals.

As an added layer of convenience, Paychex has a mobile app that you can use to view your accounts. Through this app, you and your employees can check your investments and review contribution amounts, as well as access various other functions that generally are accessed via the desktop version.

Paychex also assigns each customer a dedicated team during onboarding to help them build, administer and troubleshoot a retirement plan tailored to the business’s unique needs. Unfortunately, like many of the employee benefits retirement providers we reviewed, Paychex does not disclose its pricing and fees online. You must contact the company to request a free quote, but this is easily accomplished online or via phone.

Paychex users also have the option of receiving financial wellness services through FinFit. With this program, employees can ensure they know where they stand regarding current financial obligations, which can help them decide how much they should be investing toward their retirement.

USA 401K logo
  • The company’s website lists straightforward and transparent pricing and fees.
  • USA 401k offers investors more than 15,000 funds and 1,000 exchange-traded funds (ETFs), including options from Vanguard.
  • USA 401k primarily offers prepackaged plans, meaning it mostly lacks customizability.
Editor's Rating: 8.7/10

USA 401k is a small, independent retirement benefits provider that offers services through a subsidiary of MassMutual. Unlike other top employee retirement benefits providers, USA 401k offers extremely transparent pricing. What’s more, the company does not charge 12b-1 fees, exchange fees or minimum-balance fees.

Employers can choose either the New 401(k) plan, which is meant for businesses with one to 500 employees, or the Existing 401(k) plan, which is designed for companies with 501 or more employees. In general, New 401(k) is better for businesses that do not already offer a 401(k), while Existing 401(k) is better for those with an existing plan. Employees get access to concierge-level guidance throughout implementation as well as ongoing administration, and they can take advantage of payroll integration and assistance with compliance and reporting.

ADP company logo
  • ADP offers customizable plans that are appropriate for businesses of all sizes.
  • Enrollment is easy and can be completed via a mobile app.
  • ADP does not disclose its fees online.
Editor's Rating: 9.1/10

ADP stands out as the best employee retirement benefits provider for small businesses because of its comprehensive payroll, HR outsourcing and benefits services, all of which can be integrated through the company’s SMARTSync Comprehensive Plan Automation. ADP offers a basic 401(k) plan that requires business administrators to select and monitor the investment options that are available to employees, as well as the more robust 401(k) Essential plan. Investments range from stock and income mutual funds to specialty funds, including real estate and technology.

With the Essential plan, you can customize automatic enrollment options, employee eligibility requirements, contributions, vesting schedules and more. Alternatively, the standard 401(k) plan requires more active management by plan administrators, which may be too much work for many business owners, especially employers with a lot of employees or employers that don’t have dedicated HR teams. Regardless of the plan, employees get access to ADP’s mobile app, which makes it easy to enroll in benefits and choose investments.

As with many top providers, ADP does not publish its pricing online. However, you can contact the company via telephone or click the Start Quote button to begin building a small business retirement plan with a representative.

Sharebuilder 401k company logo
  • ShareBuilder 401k uses low-cost investments to guarantee that investment fees stay below 1%.
  • All plan paperwork and administration are digitized and easy to access.
  • There are no IRA options and no mobile app.

 

Editor's Rating: 8.7/10

ShareBuilder 401k is a standout in the retirement benefits space because of its low fees. It specifically designs employer retirement plans with low-cost investment options to make sure that total investment fees remain under 1%. Plans start at $25 per month for solo 401(k) plans, plus 0.75% for plans with 11 to 25 participants and less than $500,000 in assets.

Another big benefit of ShareBuilder 401k is that the entire process of setting up and administering a small business retirement plan is digital. All paperwork and administration are automated, and it’s easy to oversee your account from anywhere. Additionally, ShareBuilder 401k recently expanded its ETF options to include environmental, social and governance (ESG) funds for the first time. We like that this expands the investment options for participants.

ShareBuilder 401k pairs you with a customer success manager to create a customized and detailed program that is tailored to your business’s and employees’ needs. From vesting schedules to employee education efforts, ShareBuilder 401k can help you build a complete program. This way, you can focus on the financial goals of both your business and your employees.

Perfect401(k) retirement plan checkmark logo
  • An implementation team manages every step, from plan design to enrollment and training.
  • Employees can easily enroll online.
  • The pricing structure makes Perfect401(k) more expensive for larger businesses.
Editor's Rating: 9/10

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 easy 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. Employees are charged 0.67% or less of their account balance each month to cover the cost of mutual funds, investment consultation, educational tools and other management fees.

Fidelity Investments company logo
  • Fidelity provides digital-only investing and a hybrid robo-advisor.
  • There are no account fees, account minimums or commissions on trades.
  • Trades aren’t free if you need assistance from a broker.
Editor's Rating: 9.2/10

Fidelity is one of the largest privately owned financial services companies in the world. The firm provides a wide array of services, including individual retirement accounts and employer-sponsored retirement plans. Many of the IRA options can be opened without an advisor, including simplified employee pension (SEP) IRAs, which are a great cost-effective option for entrepreneurs. Accounts can be set up quickly and easily online.

Within these retirement accounts, particularly the IRA options, Fidelity customers get access to a full array of investment 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 online, Fidelity is a great option that has a well-deserved excellent reputation.

Guideline company logo
  • Guideline offers safe harbor 401(k) plans at multiple price levels.
  • Plan pricing is extremely transparent.
  • The features may not be sufficient for larger, more complex businesses.
Editor's Rating: 9/10

Guideline is a relatively new company that has a particularly strong safe harbor 401(k) offering. Safe harbor 401(k) plans are great for small business owners because they allow company owners 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, because 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 cost-effective. 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% annually.

Vanguard company logo
  • Vanguard offers a wide variety of funds, including Vanguard’s Target Retirement Funds.
  • The average fund expense ratio at Vanguard is 84% lower than the industry average.
  • The trading platform is less user-friendly than some competitors’.
Editor's Rating: 9.1/10

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 because of 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% have outperformed their peers over the past decade. What’s more, the average fund expense ratio at Vanguard is 84% 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.

Employee Retirement Provider Costs

Business owners can expect to pay $20 to $200 per month for their employee retirement plan, plus $4 to $15 per employee per month to cover the cost of administration and recordkeeping.

Additionally, when small business owners set up a retirement plan, there are usually annual fees for administration, recordkeeping and filing preparation. Providers also may charge fees for serving as a plan fiduciary, conducting on-site visits, or preparing educational materials or newsletters. Some companies may charge separate annual advisory fees for assisting with plan design and serving as a resource for employees who need assistance.

Separately, many costs of small business retirement plans are covered by the expense ratios of the investments included in the plan. These fees are paid by mutual funds to the plan provider based on the amount of assets that plan participants have invested in the fund.

Key TakeawayKey takeaway

Employee retirement plans typically charge a base rate ranging from $20 to $200 per month, plus $4 to $15 per employee per month.

Choosing Employee Retirement Providers

Selecting an employee retirement benefits provider takes some research and careful consideration of your particular circumstances. Even after you settle on a platform, you should reassess it periodically to make sure you’re getting everything you need. Follow these steps to choose the right employee retirement benefits provider for your business:

1. Research providers.

First, survey the providers that offer different types of retirement accounts. You should consider what services and plans they offer and how much they charge. Keep in mind that past performance does not guarantee future results.

2. Check out reviews.

Once you know what individual platforms offer, read customer reviews and keep an eye out for red flags. Pay close attention to the quality of customer service that customers have received, what problems they’ve encountered and the overall reputation of the provider.

3. Evaluate the investment selections.

When you’ve found a reputable firm that offers the type of plan you want, consider the kinds of investments it allows employees to make through that type of plan. Does the company give you the latitude to invest in what you want? Plans should include funds that offer access to both stocks and bonds.

4. Review the fees.

ETFs and mutual funds charge fees, also known as expense ratios, to cover the cost of operating the fund. Carefully review the investments offered by each plan provider and their associated fees. Even small differences in expense ratios can greatly affect the final value of an employee’s retirement fund over time.

5. Reevaluate periodically.

After you choose a provider and set up an account, review both your account and the provider regularly to gauge their performance. Assess both at least annually to make sure you don’t need to make a change.

Advantages of Employee Retirement Plans

Retirement benefits can be a big draw for employees. In fact, 81% of major employers offer a 401(k) plan, according to a survey from Callan, making it an important benefit to offer to your team. Fortunately, anyone can set up a retirement plan for their small business, but using an independent provider can help you compete with the resources of larger companies. Here are a few benefits of using a professional provider.

  • Helps to attract and retain talent. Today’s job market is competitive, especially for small business owners looking for workers. The U.S. unemployment rate sits at 3.8 percent as of March 2024. Many industries have faced labor shortages, and the cost of training and onboarding new employees is prohibitive for many businesses. 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 a retirement plan.
  • 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 providers can ensure that employees have easy access to their retirement accounts
  • Saves time for recordkeeping. Retirement plan providers have software that makes plan administration and recordkeeping totally seamless and largely automated.
  • Reduces the pressure of compliance requirements. The professionals who work with retirement service companies are up to date on the regulations and familiar with current best practices. [Related: How to Borrow Against Your 401(k).]

Employee Retirement Provider Features

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

  • Onboarding: Benefits need to be explained to employees as part of their enrollment. Some providers offer an introduction and/or training course to educate employees about the benefits available to them.
  • Easy online administration: You should be able to handle your plan’s benefits administration online without ever having to visit an advisor’s office.
  • Recordkeeping and compliance: Plan providers should handle all aspects of plan compliance, annual filings and necessary documentation.
  • Investment selection: Most providers help you pick the investment options to include in your plan and guide you in employee eligibility and company 401(k) matching.
  • Mobile enrollment for employees: Increasingly, people spend more time on mobile devices in lieu of PCs. Employees should be able to handle their account setup and maintenance via a mobile app or browser.
  • Employee resources: Plan providers should serve as a resource for employees who have questions about their benefits, though most don’t provide investment advice.
  • Artificial intelligence: Many retirement plan providers now provide AI-powered “robo advisors” to help enrollees plan for the future. This makes retirement planning more accessible for employees, and can help them manage risk.
Did You Know?Did you know

Offering employee retirement plans helps your business as well as your employees. Learn how offering a 401(k) plan benefits small businesses.

Employee Retirement Provider FAQs

Anyone who has earned income and isn’t eligible for an employer-sponsored retirement plan can set up a 401(k) of their own. It’s not easy, but it can be done. The IRS has numerous administrative and recordkeeping requirements. There are forms that have to be filed at setup and annually – tasks that employee retirement benefits providers handle on a plan sponsor’s behalf.

If a 401(k) plan sponsor – a small business owner or self-employed entrepreneur with a 401(k) – is dissatisfied with their 401(k) provider, they can change providers. Making a change is typically inconvenient and involves meetings with employees for training and re-enrollment, but you can certainly do it if you aren’t satisfied.

The IRS issues guidance on how much employers and employees can contribute to 401(k) plans each year. For tax year 2024, employers can contribute at most 100% of the employee’s total annual wages or $69,000 – whichever is smaller – up from $66,000 in 2023. This limit increases to $76,500 for employees ages 50 and older. However, the $69,000 figure represents the maximum allowed total for employee and employer contributions. Employees can contribute at most $23,500.

Retirement options are only slightly different for small business owners with no employees other than a spouse. In that case, you can set up a self-employed 401(k) with a $23,000 annual contribution limit as of 2024 ($30,500 for people aged 50 and over), which is up from $22,500 in 2023. Total employee and employer contributions cannot exceed $69,000.

Small businesses that have fewer than 100 employees and are setting up a retirement plan for the first time may be eligible for the Retirement Plans Startup Costs Tax Credit. For the first three years you offer a retirement plan for employees, you can earn a credit for up to 50% of the plan’s setup costs. This can amount to the greater of $500, or the lesser of $250 multiplied by the number of eligible employees or $5,000. Contributions for employer matching are also tax deductible.

Some states have either passed or are considering legislation requiring businesses to provide a retirement plan or to register with a government-sponsored retirement plan. These laws are aimed mostly at larger businesses, but some apply to small businesses as well. For example, California now requires businesses with five or more employees to enroll in the state CalSavers program if they don’t already offer retirement benefits. Employers pay nothing for CalSavers and have few responsibilities, but noncompliance can result in a fine of up to $750 per employee.

Max Freedman contributed to this article.

author image
Max Freedman, Business Operations Insider and Senior Analyst
Max Freedman has spent nearly a decade providing entrepreneurs and business operators with actionable advice they can use to launch and grow their businesses. Max has direct experience helping run a small business, performs hands-on reviews and has real-world experience with the categories he covers, such as accounting software and digital payroll solutions, as well as leading small business lenders and employee retirement providers. Max has written hundreds of articles for Business News Daily on a range of valuable topics, including small business funding, time and attendance, marketing and human resources.
Back to top
Desktop background imageMobile background image
In partnership with BDCBND presents the b. newsletter:

Building Better Businesses

Insights on business strategy and culture, right to your inbox.
Part of the business.com network.