Equitable is rolling out a new program tailored to the 401k micro market.
The program, Retirement Gateway for Small Business, is designed for startup 401k plans and plans with account values up to $500,000.
“We anticipate the enhanced tax credits for small businesses establishing retirement plans included in the SECURE Act 2.0 proposal will help grow the micro 401k market over time,” said Keith Namiot, Chief Operating Officer of Group Retirement at Equitable. “We have aligned our new program with where the market is expected to grow, and we are excited to help plan sponsors and advisors overcome the administrative barriers associated with setting up 401k plans—a hurdle that has historically deterred many small businesses from offering them.”
Retirement Gateway for Small Business is poised to capitalize on other proposed provisions of SECURE 2.0, like the automatic enrollment requirement for new plans created by businesses with 10 or more employees. The growth of state-mandated retirement plans is also driving the demand for this type of program.
All new Equitable 401k clients with plan account values of up to $500,000 have access to Retirement Gateway for Small Business. The program offers packages of services—some of which are made available through partnerships with unaffiliated third-party providers—to help ease demands on plan administrators and improve participant outcomes. They include:
- 3(16) Administrative Fiduciary: Significantly relieves the fiduciary burdens of running a 401k for plan administrators.
- 3(38) Investment Fiduciary: Provides professional assistance with investment management tasks.
- Automatic Enrollment: Reduces the amount of time employees spend on the enrollment process, which can lead to greater participation and increased savings rates.
- Stadion Managed Accounts as the QDIA: Reduces the complexity of selecting investments by automatically investing participants in a personalized portfolio.
- 360 Payroll Integration: Reduces the amount of time and effort spent managing census and payroll files.
“Predefined packages help advisors reduce the administrative burden and time spent selecting a plan, point their clients to the right amount of fiduciary coverage based on their specific needs, and streamline the overall onboarding process.”
Equitable’s Jay Zickerman
“Small business owners are focused on operating their organizations. That’s why it’s important to take the guess work out of choosing the right retirement plan design that can help them achieve the best participant outcomes,” said Jay Zickerman, head of Product Innovation and Implementation for Equitable’s Group Retirement business. “Predefined packages help advisors reduce the administrative burden and time spent selecting a plan, point their clients to the right amount of fiduciary coverage based on their specific needs, and streamline the overall onboarding process.”
Another goal of the program is to help cut the time spent on getting plans up and running by quickly connecting advisors to a third-party administrator (TPA), who can assist with plan design, implementation and ongoing administration.
Compass Retirement Consulting Group, Inc., a retirement plan consulting firm, will serve as the plan’s TPA and 3(16) administrative fiduciary for the Retirement Gateway for Small Business program.
Equitable’s Group Retirement business offers tax-deferred investment and retirement solutions for employer-sponsored plans and consists of small-to-medium size businesses, educators and other public sector employees. The business serves more than a million clients with $45 billion in account value and assets under administration as of June 30, 2022.
SEE ALSO:
• Just 1 in 4 Small Businesses Currently Offer a 401k
• Equitable Adds Managed Accounts, Cash Balance Solution to SMB Retirement Plans