How to Choose a 401k Program for Your Company

Selecting a 401k plan for your company requires you to understand both the market and the needs of your business.

Instructions

Difficulty: Challenging

1. Consider engaging a benefits consultant to help you shop for the most cost-effective program you can get. If you hire a consultant, make sure you deal with one who has worked with a number of programs.
2. Determine your needs and goals, then survey the market for 401k programs that would meet these objectives.
3. Narrow the field, then request information on the plans that appear most likely to meet your requirements.
4. Look for a plan that has a broad range of investment options. Keep in mind that employees will have varying appetites for risk and a range of investment goals.
5. Ensure the plan offers investors a toll-free help line.
6. Note whether the plan provides quarterly financial statements to employees. Employees also will want informational brochures and access to a Web site that offers educational materials and other relevant content.
7. Ensure the plan provides an intermediary who will help your human resources and payroll departments deal with administrative issues.
8. Make sure the plan will help with the enrollment process.
9. Ask about fees. Different plans have different fee structures; you might need help making meaningful comparisons among plans.
10. Consult your company's treasurer, attorney and benefits manager before making a final selection. Get their ideas about the plan's suitability.