California law requires all employers with at least one employee in California to offer a retirement plan to their workers. The law was passed to help workers save for retirement, as many Californians were not saving enough to support themselves in their later years. Employers have two options to comply with this mandate: they can either use the state-run CalSavers retirement plan or they can choose a private-sector plan like Icon.
While CalSavers may seem like a good option, there are several reasons why small businesses should consider switching to Icon.
1. Icon is a Fully Automated Plan
Icon retirement plans remove the administrative burden from employers. You can set up your plan in minutes and we integrate with your banking and payroll partners. Once your plan is ready, we handle everything for you, including all enrollment and employee communications. You’ll have an easy to use dashboard so that you can easily review and monitor your plan.
And unlike with a 401k plan, Icon plans never require plan testing, federal filings, and never make the employer the fiduciary. Icon is a payroll deduct IRA with auto-enrollment. Employees can opt out of the plan if they choose not to participate.
2. We’re a Fiduciary
One of the main benefits of using a private-sector retirement plan like Icon is that we’re a fiduciary with oversight of the investments. CalSavers offers only a limited number of investment options, which may not meet the needs of all employees. With Icon, employees’ savings are invested in a portfolio tailored to their needs. This allows employees to have a more personalized plan that is automatically managed for them. Employees can easily track their plan details through an easy to use interface.
3. Lower fees
Another advantage of Icon is lower fees compared to CalSavers. While CalSavers fees are reasonable for the employer, they are higher than what many private-sector plans charge for the employee. Icon offers competitive pricing, which can help small businesses save money in the long run. Lower fees can also mean higher returns on investments, which can be a big benefit to employees.
4. Better customer service
Many small businesses may find that Icon offers better customer service than CalSavers. This is because we have dedicated representatives who can assist with setting up and managing retirement plans. This can be especially helpful for small businesses that may not have a dedicated HR department. Additionally, Icon may offer more personalized service and support, which can help employees make informed decisions about their retirement savings.
In summary, while CalSavers may seem like the easier option, small businesses should consider switching to Icon to take advantage of the investment options, lower fees, better customer service, and flexibility. By offering a retirement plan like Icon, small businesses can help their employees save for a secure retirement and stay competitive in today’s job market.