Choosing the best 401k for your small business can be overwhelming. Between fiduciary risks, compliance, and hidden fees, many small business owners are now exploring simpler, low-cost retirement alternatives.
What Makes 401k Plans Expensive for Small Businesses?
Even the best 401k plans can create challenges for businesses:
- You become the plan sponsor. You’re responsible for compliance, filings, and fiduciary liability. Most businesses don’t realize they hold the fiduciary responsibility and legal risks.
- Costs stack up. Monthly fees, per-employee charges, and required employer match add up fast.
- Setup is complex. Paperwork, plan design, and IRS filings slow things down.
- Ongoing compliance is heavy. Annual testing, government filings, and possible audits create risk.
- Employees face rollovers. When they leave, accounts may be cashed out, lost, or forgotten.
Key Questions Before Choosing a 401k for Your Small Business
- Who handles compliance and testing?
- What happens if your workforce grows or shrinks?
- Can you afford a required match for every eligible employee?
- What is the true long-term cost in money and time?
The Alternative: Icon’s Portable Retirement Plan (PRP)
Instead of sponsoring a 401k, many small businesses now choose the PRP — a fully managed, low-cost retirement plan designed for today’s workforce.
- No fiduciary responsibility. No plan sponsorship burden risk.
- No filings or audits. No ERISA requirements or government paperwork.
- Affordable and simple. One flat monthly fee, no required match.
- Works for all types of workers. W-2, 1099, part-time, and full-time.
- Fully portable. Employees keep their account even when they leave.
Compare: PRP vs 401k
| Feature | Icon PRP | 401k Plan |
| Employer role | No sponsorship or fiduciary duty | You’re the sponsor and fiduciary |
| Setup | Fully digital, ~30 minutes | Paperwork-heavy, slow |
| Compliance | No filings or audits | Annual filings and testing |
| Cost | Flat monthly fee | Monthly, per-employee, plus match |
| Eligible workers | W-2, 1099, part-time, full-time | W-2 only |
| Portability | Employees keep their account | Rollovers required when they leave |
Why Small Businesses Choose the PRP
✅ No legal or fiduciary burden
✅ No filings or ERISA compliance
✅ Low-cost, no required match
✅ Flexible for any workforce
✅ Employees keep their retirement savings
The Best 401k for Small Business? Here’s the Bottom Line.
If you’re looking for the best retirement plan for your employees, consider this:
What if the right plan for your business isn’t a 401k at all?
The PRP may offer a simpler, more affordable way to help employees save — without the headaches of a 401k.
Learn more about choosing a retirement benefit.
Connect with a retirement specialist.
FAQs
Businesses should consider their needs and look for a plan that suits them. Be sure to consider 401k alternatives and look at the plan cost, complexity, and compliance requirements.
The PRP takes the headaches out of offering a retirement benefit. There’s no required match, no annual testing or audits, and no compliance maze to navigate. It’s simple to set up, easy to manage, and designed to work for your business—not against it.
Yes. With the PRP, employees keep their retirement savings when they leave—no paperwork, no abandoned accounts. It’s their plan, not the company’s. That means you’re giving them something that actually supports their future.