Best 401k Software include:
Wolters Kluwer offers ftwilliam.com, a cloud-based employee benefits and pension software solution supporting document sharing and distribution, as well as tools to allow users to securely send messages and files back‐and‐forth to clients and e-sign documents helping streamline retirement…
Actuarial Systems Corporation (ASC) headquartered in Sylmar offers Retirement Plan Software, including Defined Contribution 401k software, and other tools.
What is 401k software?
401k administration software provides a simple solution for businesses to administer 401k retirement plans for employees. Offering a 401K plan to your employees can help increase employee satisfaction and retention. However, you can set your company up for penalties and audits if you don’t follow all the complex legal requirements set forth by the IRS and the Department of Labor (DOL). 401K software helps you design a 401K plan that meets your company goals while staying in compliance.
401K software allows employees to set the terms for their retirement plans, including contribution amounts, loans, and investment vehicles like mutual funds. These services also allow employers to designate terms for matching, vesting, and profit-sharing. They act as a go-between for the employer and the record keeper who holds the plan’s assets.
Employers must ensure that their 401K plans meet Employee Retirement Income Security Act of 1974 (ERISA) guidelines. The two most important ERISA guidelines are fiduciary liability and non-discrimination. Fiduciary liability involves anyone who makes decisions regarding the management of assets is considered a fiduciary and can be held personally liable if it is determined that the fiduciary did not act in the best interest of the plan participants. Non-discrimination includes a series of rules and annual tests set forth by the IRS to ensure a company’s plan does not discriminate against non-highly compensated employees (NHCEs).
401k Software Features
Useful features offered by most 401k software vendors include:
Integration with third-party applications, including payroll providers
3(38) or 3(21) fiduciary status to manage liability
Compliance testing for IRS nondiscrimination rules
Safe harbor plans
Loans and hardship withdrawals
Employee matching, vesting, and profit-sharing
Tax filing and creation of report materials
These features are not offered by every vendor, but are helpful to have:
Training on changing IRS regulations
Reporting and benefits statements
Employee self-service portal
Dedicated account manager
401k Software Comparison
Consider these factors when comparing 401K software:
Company Size: One of the most important factors to keep in mind is the size of your company. Guideline, for example, is sufficient for a small business with minimal 401k needs but may have limitations when serving a more sophisticated plan. Therefore, researching the size and type of businesses vendors are more suited for is an important step in deciding.
Ease of Use: It’s important to research how easy the platform is to use for both administrators and employees. Similarly, the amount of support a vendor offers upon encountering an issue is a useful feature that users should look for.
Some vendors charge a flat rate fee per participant per month while others offer annual subscription fees. Monthly fees range from $4 - $8 per user per month and some include a $40 - $120 base fee per month in addition to the user fees. Employees may pay an investment portfolio fee to the vendor as well.