‘Tis the season for teaming up (apparently).
Fresh on the heels of a budding fiduciary friendship between Pensionmark and Pension Resource Institute comes news that Millennium Trust Company will partner with Paychex to offer a SIMPLE IRA (or a Savings Incentive Match Plan for Employees Individual Retirement Account) to employers with 100 or fewer employees.
It will include “innovative features” such as auto-enrollment and investment fiduciary services, according to the companies.
“Small businesses increasingly recognize the importance of retirement plans in attracting and retaining talent, but there are barriers that keep them from investing in employer-sponsored workplace savings solutions,” said Gary Anetsberger, CEO of Millennium Trust Company, in a statement. “A SIMPLE IRA plan is a low-fee retirement savings plan that offers many of the same features found in 401k and state-based retirement savings programs including auto enrollment and auto escalation.
A SIMPLE IRA plan allows employees and employers to contribute to traditional IRAs set up for employees. It is ideally suited as a start-up retirement savings plan for small employers not currently sponsoring a retirement plan.
It’s also inexpensive to set up and operate, employees share responsibility for their retirement and there is no discrimination testing required. However, contributions are somewhat “inflexible,” according to the IRS, and their limits are lower than some other retirement plans.
“Approximately 40 percent of Americans don’t have access to retirement benefit plans at their place of work,” said Terry Dunne, managing director of retirement services at Millennium Trust Company, citing a Pew Charitable Trust 2016 study. “Our alliance with Paychex will help reduce the cost burden that small companies struggle with, and increase access to retirement savings for employees of small businesses.”
“This new SIMPLE IRA offering …builds on that foundation, adding a solution that helps small business owners address the demands of the growing retirement crisis and the increasing number of states mandating IRA programs,” added Tom Hammond, vice president of corporate strategy and product management at Paychex.
Paychex said it “allied” with Millennium Trust due to the firm’s extensive IRA custody and servicing capabilities.
Millennium Trust’s integrated custody and service platforms provide automatic plan adoption by employers and auto enrollment for employees.
Employers, as well as their employees, also have access to the Millennium Trust Workplace Savings portal, along with call center support to efficiently manage the plan and SIMPLE IRA accounts.