Payroll provider retirement plans are very similar to those first checking accounts we all opened. They are a marriage of convenience, someone you were already familiar with, and had a product that allowed you to start saving for your retirement. Unfortunately, just like the first time you overdrew your checking account, you thought it was working great until you were told you needed to fill out and distribute your own employee notices, or wanted help holding an employee education meeting for the 401(k). For a few unlucky employers, it may have even been when you failed a discrimination test leading to either a refund of your own contributions or making a larger employer contribution than you expected. All things local Third-Party Administrators and Financial Advisors help you manage.
Also like the student checking account, the person who helped you open the account that first day will still greet you when you visit the branch, but all of a sudden you need to call the 800# on your statement when you have questions. It’s no longer the personalized service you expected, so getting advice that is specific to your company, takes more time to explain, and some of the details start to get lost when telling the same story the next time around.
Lastly, it’s a very cookie cutter approach. When you open the student checking account you are just that, a student. You are not the doctor, or the civil engineer you are bound to become, so as a student, your get the student account. Same with your company, this being your first foray into a company retirement plan, you get the standard company 401k plan. It’s the same as getting ice cream from your local fast food chain, you get two choices, and while it counts as ice cream you know the local place around the corner will have just the flavor you are looking for.
Life Inc. Retirement Services 