What Are the Key Advantages of Choosing 401k Easy Online Over Another 401k Plan?
1. It's Easy to Use
With 401k Easy Online, most small businesses can run their 401k plans in less than 20 minutes a month. You simply feed some basic payroll information — the same data most off-site, third-party vendors would make you collect anyway — and click "Process." In seconds you're ready to print account statements for plan participants, run compliance tests on your plan (in seconds), or prepare any of a myriad of useful reports for your records.
2. It Keeps Your 401k Assets Secure
With 401k Easy Online you have direct, constant control and oversight over your employees' 401k contributions — from the time the money is separated from their taxable payroll until it's safely and securely deposited into their 401k investment accounts. The press has reported on the diversion of plan assets by unscrupulous employers and unscrupulous third-party administrators. 401k Easy Online helps protect employees' assets because all transactions occur between the employer and the investment company housing the plan's assets. There are no middlemen.
As an additional 401k Easy Online safety measure, each plan participant can process and print a personal account statement at will — as well as other reports that document every transaction. These handy easy-to-read reports make it virtually impossible for malfeasance to go undetected — particularly when the statements are viewed in conjunction with employee pay stub deductions. The 401k Easy Online statements summarize the participant's overall 401k activity during the month (deposits, withdrawals, transfers in and out) and show where the money went and what it's current value is.
3. It's Extremely Affordable
401k Easy Online saves clients, on average, 60% to 90% a year off traditional 401k expenses.
- With pricing that starts at just $1195 a year for plans serving two to four employees and that increases ONLY with plan size (all options, investments, tech support and more included), 401k Easy Online pricing is hard to beat.
- Visit our Pricing and Price Comparisons page to see how affordable a 401k Easy Online plan can be for your company — and don't forget to try the online 401k demo to experience how easy it is to save all that money.
What Are the Key Differences Between 401k Easy Online and Other 401k Plans?
Cost is the primary difference that sets 401k Easy Online apart from the competition.
- Given that cost is often THE mitigating factor in whether or not a company chooses to sponsor a 401k, we made sure to make 401k Easy Online relatively affordable — without skimping on plan design or other factors that make for a 401k plan that is popular with company employees.
- No 401k plan reasonably comparable in its offerings is priced as economically as 401k Easy Online.
Investment flexibility is the other key aspect that sets 401k Easy Online apart from the competition:
- With 401k Easy Online, you can offer any of an immense array of no-load mutual fund families (including no-load institutional mutual fund families) and/or self-directed brokerage accounts as your 401k plan investments.
- Self-directed brokerage accounts mean each plan participant has access to his or her choice of a seemingly endless array of investments. Stocks, options, foreign securities, mutual funds, bonds, corporate, municipal and zero coupons, certificates of deposit, government obligations, and UIT's are all available via self-directed brokerage accounts.
- Most 401k plans offer far less selection; some give employers no choice — that is, the plan provider pre selects the investments, usually their own, and often charges significant fees for additional, nonproprietary investments.
Additional factors — 24/7 online access to information and processing, instant processing (no lag times), user-friendly self-service administration, user-friendly self-service plan participation — also distinguish 401k Easy Online from the competition, but for many clients, particularly small business clients, cost and investment flexibility determine not only the 401k provider but whether or not to offer the benefit of a 401k plan at all.
What Is a "Prototype Plan" and What Does It Mean That 401k Easy Online Includes One?
A prototype plan is a document describing and defining every aspect of a master 401k plan. The IRS analyzes this master and deems it "approved" or "disapproved." Once approved, the master can be used to create any number of 401k plans that fall within the approved specifications.
- Included in the prototype plan can be a certain amount of plan flexibility, such as a variety of possible participation eligibility requirement.
- With 401k Easy Online, you have IRS-approved flexibility with your plan's participation eligibility parameters, with whether or not to offer employer contributions and if so what type (matching, profit-sharing, and/or qualified nonelective) and at what rate, with whether you want to offer 401k loans, and more. See the Plan Options tab within our Order page for a complete list of customization flexibility currently open to clients using our IRS-approved prototype plan.
- Ongoing plan qualification depends on, among other things, that your plan pass its annual IRS compliance tests (that is, unless you have chosen to run your plan via the IRS-approved safe harbor method of plan administration, in which case compliance tests are irrelevant).
- 401k Easy Online includes both point-and-click compliance testing with results in seconds (so you can run the tests after you finish each month's processing to see long before the official year-end tests if any undesirable trends are surfacing) and safe harbor software automation functions.
We Already Have a 401k Plan, But It's a Headache and Costs a Fortune. Can We Switch?
Yes. We can certainly handle what is known as a takeover or conversion plan. With our streamlined process, there is NO lengthy black-out period.
- We create the customized 401k Easy Online plan that you desire and get it up and running.
- Your employees enroll in the "new" plan; enrollment includes designating investments from the fresh array of those you have chosen to include.
- We guide the process of liquidating former 401k assets and transferring the proceeds into the new plan.
- 401k Easy Online automatically allocates inbound asset transfers into each appropriate participant account, allocating them among that participant's designated investments according to allocation schedule the participant defined when signing up.
- The entire plan conversion process is transparent and can be monitored via 401k Easy Online by you as well as your employees.
Can We Hire You to Set Up and Run Our 401k? What Is the Cost?
Pension Systems Corporation does not offer full service 401k plans, but we can recommend an affordable, reliable provider once we know your 401k needs. Please contact us if you would like help finding a quality, affordable full-service 401k plan provider, whether for a small business or large.
We Have Never Sponsored a 401k Plan Before. Will Someone Help Us With the Particulars?
In helping you establish your 401k Easy Online 401k plan, we will explain the 401k basics to you as well as the plan customization options we offer and how each typically affects the operation and popularity of a plan of your size.
Once you choose the features you want for your company plan, we hardwire your decisions into your 401k Easy Online plan sponsor and plan participant gateways. Your portals then "know" your plan and allow the online software to handle much of your self-service plan administration for you.
- The 40k Easy Management Guide gives two levels of help: The Quick Guide offers getting-started as well as basic operational support; the complimentary 401k Easy Management Guide provides background details on 401k plan operation, including less frequent transactions.
- We offer free technical support, too, should you ever need it.
Our technical support staff fields inquiries on technical, software-related questions as well as general 401k operational questions. We are not, however, pension law attorneys, accountants, actuaries or tax preparers, who are the only qualified people to answer certain questions. It is always advisable to consult with your tax and/or legal advisors in matters that concern your company's 401k plan.
What If We Start With a Self-Service Plan, Then Later Decide We Want a Full-Service Plan?
If, for any reason, you decide you no longer want to run your 401k plan via 401k Easy Online, we can convert your plan into a 401k serviced by an outside company. We can even recommend a quality provider who specializes in 401k plans of your size.
Contact us if you want information about converting your 401k Easy Online plan into a full-service plan, whether to be administrated by a third party service provider we recommend or one you find on your own.
Can 401k Easy Online Handle Matching Contributions? Profit-sharing Contributions? Are Either Mandatory? Do We Have Control Over Rates and Vesting Schedules?
401k Easy Online allows for the most popular 401k options permitted under current law but does not mandate inclusion of any. Employer matching contributions, profit-sharing contributions as well as qualified nonelective contributions are included in these options.
- With 401k Easy Online you decide whether to offer (or exclude) employer contributions.
- If you decide to include employer contributions, you choose the type(s) — matching, profit-sharing and/or qualified nonelective — and define the rate(s). Most any rate allowed by 401k regulations is permissible with 401k Easy Online.
- If you decide to include employer contributions, you define the vesting schedule(s), too. You can choose a different schedule for matching versus profit-sharing contributions. Qualified nonelective contributions are, by law, always 100% immediately vested when made.
- You can read about your 401k Easy Online plan and system design options, including the option of offering 401k loans, at our Order + Plan Customization page.
Does 401k Easy Online Let Us Exclude Part-Time Workers from Receiving 401k Employer Contributions?
To exclude part-timers from receiving employer contributions, simply exclude them from participation in the plan by setting appropriate length of service and other participation requirements for your plan. (See the Plan Options tab on our Order page for details.)
- If you want part-timers to be able to participate in your 401k plan but not receive employer contributions, you are better off not offering employer contributions but instead offering some type of bonus to the groups of employees you seek to reward. 401k contributions are a percentage of pay, including bonuses, so paying bonuses will allow employees to contribute more to their 401k accounts themselves (in lieu of your making contributions for them). Please contact us or consult your tax advisor for details and further options.
Can 401k Easy Online Handle 401k Loans? Does Our Plan Have to Offer 401k Loans? Do 401k Loans Increase the Price of Our 401k Easy Online System?
401k Easy Online allows for all the most popular 401k options permitted by law but does not mandate inclusion of any. 401k loans are one of these options. Your company sets the policy for its plan within the IRS guidelines.
There is no extra charge for including 401k loan capabilities in your 401k Easy Online system. When a plan participant takes a loan disbursement (or hardship withdrawal), though, there is a one-time $30 fee. Some companies choose to pass this fee on to the plan participant taking the disbursement; that is up to you to decide and put into your company's 401k Loan Policy.
- Your company can charge plan participants a "reasonable" (in the IRS' eyes) fee for processing 401k loans; $25 to $50 is most common.
- 401k Easy Online includes point-and-click tools for for, on the administration side, processing 401k loans and, on the participation side, modeling and applying for 401k loans.
- We do not charge your company or its plan participants any ongoing or annual fees on 401k loans. We do, however, charge $30 at the time of the loan disbursement (as we do with hardship withdrawals and other disbursements).
- You can read about your 401k Easy Online plan and system design options, including the option of offering 401k loans, at our Order + Plan Customization page.
NOTE: In 2002 the availability of 401k loans to certain business owners and officers was liberalized within what are known as the EGTRA Amendments. You can view a summary of the amendments within this web site's ERISA 404c Compliance tab within our Support section. If you are a business owner and intend on taking out a 401k loan, we suggest you talk with a qualified tax advisor first to make sure you understand the new, more liberal regulations.
Can 401k Easy Online Handle 401k Hardship Withdrawals? Does Our 401k Easy Online Plan Have to Offer Such?
The Internal Revenue Code says hardship withdrawals MUST be available to qualifying participants of every 401k plan.
- Your company can charge its plan participants a "reasonable" (in the IRS' eyes) fee for processing hardship withdrawals; $25 to $50 is most common.
- We charge $30 per hardship distribution.
- 401k Easy Online includes point-and-click tools for for, on the administration side, processing 401k hardship withdrawals and, on the participation side, modeling and applying for 401k hardship withdrawals.
- We do not charge your company or its plan participants any fees on hardship withdrawals.
What Investments Come With 401k Easy Online? Can We Offer 401k Self-Directed Brokerage Accounts?
401k Easy Online clients can choose mutual fund families (including no-load institutional mutual fund families) and/or self-directed brokerage accounts for their 401k plan.
- The mutual fund families are all SEC-regulated and all offer a diversity of risk-return scenarios.
- To simplify administration and concurrently keep participants from feeling overwhelmed with possibilities, we often recommend choosing no more than three families of mutual fund investments for a self-service 401k plan. Each family is designed to encompass the full spectrum of investing needs. By choosing three full-spectrum families, employers fuel their 401k with appeal while avoiding investment complexity that can deter some employees from joining the plan.
- Self-directed brokerage accounts (through Schwab, Ameritrade, Fidelity or others) provide a greater number of investments and investment types, which appeals to some employees and their employers. There is a tremendous selection of no-transaction-fee mutual funds as well as stocks (major exchanges and OTC markets), options (covered calls), foreign securities (both listed and OTC), bonds (corporate, municipal, and zero coupon), and certificates of deposit, government obligations, and UIT's available through self-directed brokerage accounts.
- 401k Easy Online clients have the choice of offering one or more mutual fund families (including no-load institutional mutual fund families), self-directed brokerage accounts — or both. The choice is up to you.
- Visit our Investments page to view specific listings of potential 401k investment options.
Why Do We Need to Resubscribe to 401k Easy Online Each Year?
401k Easy Online, like tax return software, runs using parameters specific to the year for which it was written. It's automated functions take into account numerous regulatory parameters. We code them in so you never have to worry about them.
- Your 401k Easy Online annual fee pays for ongoing as well as end-of-year technical and regulatory updates of your customized 401k Easy Online system.
- Updates are seamless and uploaded by us directly into the master 401k Easy Online system. You do not have to do anything.
- Your 401k Easy Online annual fee is, on average, 60% to 90% less than what you would pay for another 401k plan (one run for you by an investment company, for instance).
- Your 401k Easy Online one-time plan and system setup fee is ONLY assessed at your plan's outset, not each year thereafter when you receive your upgraded system.
Why Is 401k Easy Online Pricing Based Upon Our Plan's Number of Eligible Employees Instead of the Number Who Actually Join the Plan?
Plan testing requirements set by lawmakers are written in terms of eligible employees, not participating employees. 401k Easy Online, therefore, tracks eligible, not just participating, employees.
The government's goal in creating the 401k plan is to encourage people to save money for their retirement. Lawmakers want all types of employees to make use of the 401k — especially those categories of wage earners who historically rely heavily on Social Security for their retirement income. Employers are permitted to restrict eligibility to participate in company 401ks somewhat, but government rules have been written to encourage participation among lower-paid and mid-level employees so they are not solely reliant upon Social Security and other government assistance during retirement.
There are numerous ways to encourage widespread participation in your company 401k plan. Our 401k Easy Management Guide contains many suggestions, or you can contact us for suggestions, particularly in choosing options for your plan (with 401k Easy Online, all the options are free).
How Does 401k Easy Online Help Us Keep Our 401k in Sync With IRS Regulations?
We have built multiple safeguards into the 401k Easy Online self-service 401k system to help you keep your 401k in line with ever-changing IRS regulations:
- We program relevant IRS regulations about contribution limits and compliance testing, among other things, into your 401k Easy Online system. For instance, you cannot enter a contribution for a participant that will push the participant's year-to-date contribution total over the allowable maximum — and the system tells you how much, if anything, the participant CAN contribute without exceeding the maximum).
- 401k Easy Online runs the all-important ADP (average deferral percentage), ACP (actual contribution percentage) and top-heavy compliance tests that every 401k plan must pass at year's end. Although your plan only has to pass these tests at the end of the plan year, 401k Easy Online can run year-to-date tests as often as you like (we recommend monthly) so you can spot noncompliance trends long before mandatory year-end testing is done.
- You can run compliance tests at a mouse click.
- 401k Easy Online allows you to run your 401k plan using the safe harbor method of plan administration instead of using 401k compliance testing, if you prefer.
- 401k Easy Online will only accept data that pertains to the appropriate calendar year, so you'll never process data under the wrong year's regulations.
Does 401k Easy Online Help With Our Plan's IRS 401k Compliance Testing?
Yes — with just a click of the mouse you can run year-to-date tests as often as you like to identify any trends toward noncompliance, so you can fix the problem before the final year-end tests.
- 401k Easy Online runs the all-important ADP (average deferral percentage), CAP (actual contribution percentage) and top-heavy compliance tests that every 401k plan must pass at year's end. Although your plan only has to pass these tests at the end of every plan year, 401k Easy Online can run year-to-date tests as often as you like (we recommend monthly) so you can spot noncompliance trends long before mandatory year-end testing is done.
- You can run compliance tests at a mouse click.
Does 401k Easy Online Help With Year-End 401k Tax Reporting?
Included with your 401k Easy Online system is free access to our 401k FedForms web site.
- The 401k FedForms web site contains annotated versions of relevant 401k-related federal reporting forms (Summary Annual Report, 5500 series, 1099-Rs, and more). The annotations tell you where within 401k Easy Online to find needed information.
- The web site also tells you what forms are relevant to your particular plan, and when each form is due to the IRS.
- The 401k Easy Online software pulls many of the numbers together for you in a brief series of easy to read reports to further expedite your federal reporting processes.
How Else Does 401k Easy Online Simplify 401k Plan Administration?
Because we're long-experienced in all aspects of 401k administration for plans of all sizes, we know plan administrators' needs and have created a series of brief, easy to read reports that enable plan administrators to find the information they need -- quickly -- so they can do their jobs -- quickly.
- Whether it's reports summarizing investment accounts that accompany the month's contributions, year-to-date account statements for plan participants, or information regarding outstanding 401k loans, the information is available at a mouse click.
- The 40k Easy Management Guide contains an index summarizing the content of each report and typical uses for the information. It's easy to determine which report will best suit your needs.