I was interviewed recently by a 401(k)-centric website about smaller plans. When I first started in 1998, there was a tremendous bias from a small start-up plan. So many plan providers didn’t want the business and these smaller plans were burdened with working with insurance companies with high, undisclosed fees.
Thanks to tech-based 401(k) plan providers like Vestwell, there is more relief today than in the past. The biggest development has been Pooled Employer Plans (PEPs), which wasn’t an option for small plans because they didn’t exist prior to 2021. While PEPs have been rather too slow to develop, I think they’re a great opportunity for small companies to get lower fees, but more importantly, remove those fiduciary liability issues by delegating them to the Pooled Plan Provider.