Low costs
Transparent pricing so your clients know what to expect and the possibility for them to receive up to $5,000/year in tax credits when they start a 401(k) plan, plus $500 for choosing automatic enrollment.[1]
Simple solutions
Set up your client's 401(k) online by selecting from ready-to-use plans or customize a plan to suit their needs.
Stronger retirement savings
Help employees plan, save, and invest for their future with a trusted firm that delivers industry-leading insights and tools.[2]
State-mandated legislation
There is a developing trend among states to enact legislation requiring employers without retirement plans to enroll their employees in a payroll deduction individual retirement account (IRA) program run by the state, unless the employee opts out. A number of state legislatures have already passed laws to create these mandatory programs and several more states have been considering them.
As of August 2021
1Under the SECURE Act, tax credits may be available to help you offset your first three years of plan startup costs in an amount equal to 50% of qualified startup costs paid or incurred, but limited to the greater of (1) $500 or (2) the lesser of (a) $250 for each non-highly compensated employee who is eligible to participate in the plan or (b) $5,000. In general, “qualified startup costs” are ordinary and necessary expenses of an eligible employer which are paid or incurred in connection with the establishment or administration of an eligible employer plan, or the retirement-related education of employees with respect to plan if the plan has at least one participant who is not a highly compensated employee. Employers should be advised to consult their tax advisors concerning eligibility for the credit.
2J.P. Morgan Guide to Retirement won the 2012 RIIA Retirement Income Communications award, the 2014 MFEA STAR Award for retail education and the 2015 WealthManagement.com Industry Award for Thought Leadership – Investing. In addition, in 2018 it won “Highly Commended” in the “Best Pensions Paper 2018 (North America)” category: https://www.savvyinvestor.net/blog/awards-best-pensions-white-paper-north-america-2018, and most recently won the Investment Management Education Alliance (IMEA) Star Awards for “Retirement Ongoing Education”. Target Date Compass 2018 Investment Management Education Alliance (IMEA) Star Award for “Retirement - Digital Innovation”. Participant Communications is a 6x Award winner for overall retirement communications and has earned 10+ Awards for enrollment, education & mobile communications.
What is a 401(k)?
By recommending a 401(k) plan, you can help your clients—and their employees—start saving for retirement.
Your clients and their employees can choose what percentage of their pay they would like to save, and whether they would like to pay taxes now or later. They can also choose from a selection of funds in which to invest. And once they reach a certain age, they can start taking money out, giving them a new source of income for their retirement. The plan will automatically deduct a percentage of earnings from each paycheck and invest those earnings so they can grow, tax-efficiently, year after year.
Why should my clients start a 401(k)?
Many businesses have been forced to rethink the products they offer, how they serve their customers and what it means to be part of a team. And employees are leaning into some of the new realities of work — virtual, contactless or spatially distanced.
This is the time to help your clients build on their progress. As their business moves ahead in a changing marketplace, they have an opportunity to strengthen their relationship with their most valuable asset — employees. A 401(k) plan shows employees that their employer is invested in their long-term success.
Here are four reasons why now is a great time to encourage your clients to offer a 401(k) at their companies:
Talent matters more than ever
Creativity and efficiency are huge competitive advantages. The knowledge and experience that key employees bring to the table are exactly what businesses need to keep moving forward. It’s more important than ever to invest in people who understand your client's business, have ideas for your client's business growth and can jump in to get things done.
Clients can be a leader - for their employees and their industry
Benefits are important to high performers, especially as they start families or begin to think about retirement. The fact is, employees need help saving for retirement, and they’re looking to their employer for guidance. According to a recent survey, 76% want encouragement to save for retirement.[1]
Your clients know how hard it is to retain talent. A 401(k) plan can help them stand out, especially during challenging economic times. In fact, 82% of employers identified that retaining quality employees was an important goal for their retirement plan.[2]
Including in a 401(k) plan as a benefit can make a big difference in the lives of employees. A survey found that 83% of workers participating in a defined contribution plan are confident about their retirement.[3]
Retirement plan costs are going down
Overall, total retirement plan costs have declined 4% since 2015, dropping slightly in each of the subsequent five years.[4]
For example, Everyday 401(k) by J.P. Morgan starts at $75 per month plus $5 per month per employee. That means your client can offer a team of five employees a retirement plan for as little as $100 per month.
When you factor in tax credits currently offered by the U.S. government, your client's costs can go even lower. Right now, a business can receive up to $5,000 per year in tax credits for the first three years after starting a 401(k) plus an additional $500 for choosing automatic enrollment.[5]
It’s easy to get started
Everyday 401(k) offers simple solutions that allow you to set up your client's 401(k) online by selecting from ready-to-use plans. You also have the option to customize the plan even further to suit their needs.
What are the benefits of a 401(k)?
Every advantage makes a difference to a business on the rise. An Everyday 401(k) plan by J.P. Morgan can help your clients acquire and retain top talent while building stronger retirement savings for themselves and their employees.
1 J.P. Morgan Plan Participant Research, 2021.
2 J.P. Morgan Plan Sponsor Research, 2019.
3 Employee Benefit Research Institute (EBRI) and Greenwald & Associates, 2020 Retirement Confidence Survey.
4 401k Averages Book, 2021. 401ksource.com
5 Under Internal Revenue Code Section 45E, tax credits may be available to help you offset your first three years of plan startup costs in an amount equal to 50% of qualified startup costs paid or incurred, but limited to the greater of (1) $500 or (2) the lesser of (a) $250 for each non-highly compensated employee who is eligible to participate in the plan or (b) $5,000. In general, “qualified startup costs” are ordinary and necessary expenses of an eligible employer which are paid or incurred in connection with the establishment or administration of an eligible employer plan, or the retirement-related education of employees with respect to plan if the plan has at least one participant who is not a highly compensated employee.
6 Employee Benefit Research Institute (EBRI) and Greenwald Research, 2021 Retirement Confidence Survey.
7 Under the SECURE Act, tax credits may be available to help you offset your first three years of plan startup costs in an amount equal to 50% of qualified startup costs paid or incurred, but limited to the greater of (1) $500 or (2) the lesser of (a) $250 for each non-highly compensated employee who is eligible to participate in the plan or (b) $5,000. In general, “qualified startup costs” are ordinary and necessary expenses of an eligible employer, which are paid or incurred in connection with the establishment or administration of an eligible employer plan, or the retirement-related education of employees with respect to plan if the plan has at least one participant who is not a highly compensated employee. Employers should be advised to consult their tax advisors concerning eligibility for the credit.