It’s funny how things work. One company believes they are the “first” to roll out a new Internet idea and, well, then so does another. The latest Internet offering is 401(k) plans via the Internet. Could this be competition for your firm’s pension plan administration niche?
Two companies have rolled out their versions of 401(k) internet sites. I’m not sure which came “first.” However, Fidelity Investments, the nation’s largest provider of 401(k) plans says they did. Their e401k site offers a frequently asked questions (FAQ) section and easy navigation through design and implementation of a company’s 401(k) plan. To learn more, all a visitor has to do is login.
The other provider is ez401k.com. It is a California–based company dedicated exclusively to internet 401(k) plan administration – I think. I really couldn’t tell from the web site if there might be a larger firm behind the site. This company is selling fast, time-saving plan administration. The site tells visitors they can get a plan in less than 5 minutes.
A study by the Profit Sharing/401(k) Coucil of America last year showed that the number of 401(k) plans have doubled in the last four years at smaller companies (those with 100-499 employees). That trend is expected to continue.
What’s the primary obstacle for small companies? That’s right. Cost. Both of these companies are betting that their new technology will make plan design, implementation, and administration less cost prohibitive. Their target is small businesses that would otherwise not be able to offer a 401(k) plan.