Employee Fiduciary Review: Bargain 401k Plans For Small Businesses

As a small business owner, you want to provide the best options for your employees.

One important benefit is providing a way for your employees to save money in a 401k. But many small businesses simply don’t have the extensive assets that some providers require to work with them.

Employee Fiduciary works with small to medium-sized businesses to provide a low-cost 401k plan. That’s right, you won’t need hundreds of employees to set up a plan. In fact, employee Fiduciary is best for companies with 30 employees or less.

Let’s explore what Employee Fiduciary has to offer.

What Is Employee Fiduciary?

Employee Fiduciary positions itself as a low-cost 401k provider for small and medium-sized businesses. The company was founded back in 2004 with the goal of providing small businesses access to retirement plans with low prices, quality service, and robust investment choices.

The company administers more than 4,000 small business 401k plans across all 50 states. Currently, the plans in place hold nearly $5 billion in assets.

What Does It Offer?

Here’s a closer look at what Employee Fiduciary has to offer.

Low Fees

The fees involved in your 401k plan can significantly impact the employee’s ability to retire. Don’t believe that fees can make a big difference? Check out our full post that explores the ins and outs of 401k fees. It’s clear that the fees can add up quickly.

The good news is that Employee Fiduciary is one of the lowest-cost 401k plan options for small businesses on the market today. Its base annual fee of $1,500 covers up to 30 plan participants and its asset management fee is very low at just 0.08%. Plus, Employee Fiduciary doesn't charge any separate fees employees.

Hands-On Support

When you're working with an investment vehicle of any kind, it's completely understandable to have questions along the way. Employee Fiduciary makes it a priority to answer your questions by providing a dedicated support person to help you along the way.

Not only can a real person help you solve any problems you encounter, but a dedicated support person will be able to help with the need to launch into the backstory each time.

Many Investment Options

When working with Employee Fiduciary, you’ll have ample investment choices to choose from. By default, the company offers access to all NSCC-tradeable funds. That means there are almost 30,000 share classes from 377 fund families to consider for your portfolio.

But if you'd like to take things a step further, you can. Through its partnership with TD Ameritrade, Employee Fiduciary is also able to offer self-directed brokerage accounts. With this option, participants can virtually access any mutual fund or ETF that's tradable on the market.

Investment Advice Available

Selecting investments is obviously a critical part of a successful retirement plan. But if you aren’t confident in making these selections on your own, that's okay! Employee Fiduciary offers the option to access professional investment advice to help you confidently curate an investment portfolio that aligns with your goals. 

Solo 401k Plans Available

Employee Fiduciary also offers Solo 401k plans for single-person businesses. That means freelancers and solopreneurs can work with the company too. But since these plans aren't free, you might want to choose one of the various low-cost Solo 401k providers that don't charge account fees.

Are There Any Fees?

One thing that sets Employee Fiduciary apart from other small business 401k providers is that it technically only charges fees to employers. Other companies like Guideline and Human Interest charge separate fees to every employee that participates in the plan.

It should be noted, though, that Employee Fiduciary does give employers the option to deduct from participant accounts (pro rata based on account balances) to cover a plan's fees. But employers can also pay all fees directly themselves. And doing so might be preferable as these costs could be considered tax-deductible business expenses.

Here are the fees that Employee Fiduciary charges to small business owners:

One-time fees

• Establishment fee: $500 to start a new plan
• Conversion fee: $1,000 to convert an existing plan

Ongoing fees

• Annual fee: $1,500 base fee. (Covers 30 employees. An extra $30 is added to the base fee for each employee over 30 employees). 
• Custody fee: 0.08% of plan assets

And here are the fees you need to be aware of for the Solo 401k:

One-time fees

• Establishment fee: $250 to start a new plan
• Conversion fee: $500 to convert an existing plan

Ongoing fees

• Annual fee: $500 base fee
• Custody fee: 0.08% of plan assets

Importantly, Employee Fiduciary is transparent about these fees. That’s a big deal in an industry that has often been known for slipping in hidden fees at every turn.

How Does Employee Fiduciary Compare?

Employee Fiduciary could be a very low-cost option if you have 10-30 employees since it doesn't charge any per-employee fees. So the closer your staff size is to 30, the more value you'll get out of the $1,500 flat base fee.

However, if you only have a few employees, you may be able to save money by choosing a different 401k providers that uses a monthly + per employee fee structure like Human Interest or Guideline. With Guideline, for example, plans start at $49 per month $8 per employee. So if you only had five plan participants, you'd pay $89 per month ($1,068 per year). 

So, in that example,  you'd save $400+ by choosing Guideline. And that's before the custody fee is taken into account. Guideline and Human Interest charge this fee to participants while employers are ultimately responsible for it with Employee Fiduciary (although they can choose to pass admin fees on to plan participants).

How Do I Open A Plan?

If you're ready to work with Employee Fiduciary, the first step is to head to their website. From there, you can ‘Request a Proposal.’

You’ll find more details about what working with Employee Fiduciary would look like for your company in the proposal. If you still want to move forward, a dedicated representative will walk you through the process. 

Is It Safe And Secure?

As a third-party 401k plan administrator, Employee Fiduciary is required to complete annual tasks to comply with the Employee Retirement Income Security Act of 1974. Your plan will meet all of the pertinent regulations.

The company's Privacy Policy offers some options to limit your data sharing. But in some situations, you won’t be able to stop the company from sharing information about you.

How Do I Contact Employee Fiduciary?

You can give Employee Fiduciary a call at 877-401-5100. Or you can reach out via a contact form on their website.

Additionally, the company is on Facebook and Instagram @employeefiduciary, on LinkedIn @employee-fiduciary, and on Twitter @401kLowCost.

Employee Fiduciary has a Better Business Bureau rating of A+. But the average customer review is just 3 out of 5 stars.

Is It Worth It?

If you're a small business owner, you’ve likely realized how difficult it can be to secure a quality 401k option for your employees. In many cases, Employee Fiduciary could provide one of the most affordable and feature-rich experiences out there.

But you'll still want to explore all of your options before making this major commitment. We recommend checking out our list of the best low-cost small business 401k providers and then getting proposals from three or more of these companies before you make your final decision.

Employee Fiduciary Features