Betterment 401(k) launched an online purchasing tool in April 2020 that allowed employers to sign up for a 401k plan entirely online. As of April 2021, 300 businesses have signed up, representing 60% of total plan growth in the last 12 months, the company announced on Wednesday. Betterment 401(k) now boasts almost 1,000 small and medium-sized business employers.
Related: John Hancock Expands ‘Personalized Retirement Advice’ Program to All 401k Plans
“The two biggest things I think that are a hurdle for small business owners and medium-sized business owners is time and money. Those barriers have been in place for a lot of these businesses for a long time, and that’s how they’ve been underserved by traditional recordkeepers,” Kristen Carlisle, General Manager of Betterment 401(k), said.
The online tool allows employers to purchase employer-sponsored 401k plans that are tailored to their workers’ needs. Employers answer questions about their company, industry and employee demographics, and purchase a plan on the site. Sign up takes about five minutes, according to the company.
The tool “makes it incredibly easy and fast for any business owner to get access to a high-quality 401k plan, and for the first time this is done without having to talk to a sales rep or anyone on plan design beforehand,” Carlisle added.
The tool was launched in April 2020, right as the pandemic was changing workflows and strategies for companies around the world. Carlisle said that in times of crisis, small businesses are often inclined to push aside anything that isn’t related to survival.
“You’re worrying about a lot of things, and you don’t have an HR team that can help you institute this type of benefit,” she said. “In the pandemic, the one thing that I think we all learned is, Americans were not ready. And in particular, I think businesses recognize that they’re, in many ways, the first entry point someone has to thinking about saving beyond the immediate future.”
Related:
Betterment Announces Zenefits Integration
Betterment 401(k) Adds New Benefits Platform Integration
How (and Why) Betterment Built a Climate-Focused Portfolio