|Feb 22 2016||
Headache Free & Cost Effective 401(k)
By: Rob Lynn
What does a payroll company know about investing and 401(k)? 15 plus years ago the defined contribution 401(k) industry, especially the smaller business markets, were dominated by mutual fund companies who offered 401(k) plans but only if the plans used their funds. This weighed 401(k) plans with proprietary mutual funds that may underperform their peers and have additional hidden costs.
Today, the 401(k) market is completely different with significant consolidation forcing out many of the mutual fund providers because they were unable to deal with the cost and complexities of running 401(k) plans while being required to offer competitor’s investments options. Now payroll service companies like Total Team Solutions along with fellow HR outsourcing service providers have taken significant market share, especially with smaller 401(k) plans, because of the efficiencies and cost saving combining payroll and retirement plan administration. Also because investment quality is critical, payroll companies can offer best of breed outside investments because they don’t manage money and because they avoide potential conflict of using proprietary mutual funds as the 401(k) product moves toward an open architecture platform.
Here are just a few advantages:
Most major record keepers & third party administrators will work closely with payroll vendors to integrate administration, and with the growing use of auto-plan features like auto-enrollment and auto-escalation, that integration will only become more important putting payroll providers, such as Total Team Solutions in a strong position. Market share will only rise as plan sponsors look to manage costs in a highly litigious world, improve efficiencies and remove administrative burdens. Fewer headaches, risk, and cost along with institutional grade investment funds is why small business owners are turning to companies like Total Team Solutions for their 401(k) plan
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