Tag: PRP

The Best 401k for Small Business — and a Smarter Alternative.

Posted on July 28, 2025 by Laurie Rowley - Retirement Benefits, Uncategorized

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.

Schedule a Call

FAQs

What’s the Best 401k for Small Business?

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.

What makes the PRP easy to use?

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.

Is the PRP portable?

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.

Secure Your Employees’ Retirement with Icon: The Easy and Affordable Retirement Plan Solution for Small Businesses

Posted on September 21, 2023 by Laurie Rowley - Retirement Benefits

Are you worried about retirement savings? You’re not alone. According to a recent study by the Employee Benefit Research Institute (EBRI), only 52% of workers are confident they’ll have enough money for retirement. But there’s good news – offering a retirement plan to your employees can help.

At Icon, we understand that offering a retirement plan can be a daunting task for small business owners. That’s why we’ve created a solution that’s easy to set up, affordable, and designed specifically for businesses like yours. Our Icon Portable Retirement Plan (PRP) is the perfect choice for small and medium-sized businesses looking to offer a retirement plan.

Our plan is fully automated and can be set up in just 5 minutes. We take care of the regulatory complexity and fiduciary burden that comes with traditional retirement plans. And best of all, our plan is a turnkey solution for you and your employees at a fraction of the cost of a 401k plan. With the Icon PRP, you can offer your employees a retirement plan that’s easy to manage and cost-effective.

But why offer a retirement plan in the first place? The EBRI study found that workers who have access to a retirement plan are more likely to save for retirement. In fact, 87% of workers who have access to a plan participate in it, compared to just 44% of workers who don’t have access. And workers who participate in a plan are more confident about their retirement savings – 72% of participants are confident, compared to just 42% of non-participants.

Offering a retirement plan can also help you attract and retain top talent. The EBRI study found that retirement savings is the most wanted benefit after healthcare. By offering a plan, you can show your employees that you care about their financial well-being and help them save for their future.

The Icon PRP is designed specifically for small and medium-sized businesses. It’s easy to set up and manage, and it’s a cost-effective solution that helps you attract and retain top talent.

Schedule a call with us today to learn more about how we can help you offer a retirement plan that works for you and your employees. We’re here to help you achieve your business goals and ensure a brighter future for your team.

Why we need an alternative to the 401k

Posted on April 20, 2023 by Laurie Rowley - Retirement Benefits

While there is no federal mandate that all companies with 5 or more employees offer workers a retirement savings plan, many states do require this. And it’s just good business. More than 60% of employees we surveyed responded they feel stressed about their finances and it’s estimated that employee stress costs U.S. companies $4.7 billion per week. Offering your employees a way to save for retirement is a key way you can help lower their financial stress as well as bolster your recruitment and retention efforts. But the 401k isn’t always the best way to do it. Here’s why.

The Problems 401ks Cause Employers

The 401k was created 50 years ago as a supplemental retirement plan to the pension as large companies began to phase out this type of employment arrangement. It was meant for large companies with a workforce that stayed put for decades. Because of this, the regulations that rule the 401k space create an inflexible, expensive plan and annual testing requirements that are easy for small and medium-sized businesses to fail. Even large companies experience problems with offering a 401k to their workforce. These are some of the most common problems 401ks cause employers:

Expensive annual non-discrimination testing. Every year, every company that offers a 401k must run a test to ensure their plan doesn’t unfairly benefit their high earning or key employees. If they fail this test they must either give back the requisite contributions to their high earners or key employees, and said employees will pay taxes on those amounts. Or they can make the necessary contributions to their non-high earning employees. It’s also common for small and medium sized companies to fail their compliance testing because they typically have a larger percentage of “rank and file” employees that contribute lower amounts to their 401ks.
Employers retain fiduciary duty to employees. As part of this duty, employers must make sure the fees charged to their employees are reasonable, the plan offers a sufficient amount of diversification and there are no conflicts of interest. For small and medium employers this is a very challenging threshold to meet because plan participants at their companies are more likely to be charged higher fees than employees at larger companies. Because fiduciary lawsuits have ballooned in the last 10 years, many companies have started carrying ERISA fiduciary liability insurance (which is an added operational cost).
Plans are expensive and complicated to set up, administer and maintain.
Lack of portability leads to abandoned accounts. Since 401ks are tied to the employer, when employees leave they must either complete a complicated and costly rollover to their new employer’s 401k plan, cash out their balance or abandon their plan. Every year, 2.8 million accounts are abandoned which can cost employers additional fees and may require special handling.

The 401k No Longer has a Product-Market Fit with Modern Workers

Anyone who has started a new company or built or created a new product knows that one of the essential milestones to success is finding “product-market fit”. This is when your target demographic is buying, using and proselytizing your product and usually happens when you have figured out how to sufficiently solve a key problem for them. The 401k had product-market fit with boomers because they stayed at the same company for decades. For employees who move around a lot, or who are contract workers, it’s no longer an adequate solution. And there are more of them than you think.

In fact, in the last 10 years 94% of net employment growth came from 1099s and in 2025 it’s estimated that 50% of the workforce will be 1099 workers. That means 50% of the workforce won’t be eligible to contribute to a 401k.

Beyond that, millennials and Gen Z employees stay an average of 2.75 years at each company. If they work for 40 years, that’s about 15 companies. Which means they’ll have to keep track of 15 401ks or complete 14 rollovers in order to fully take advantage of their retirement savings plans. It’s no wonder that $92 billion in assets are cashed out each year at job change.

In addition to the non-portability of the 401k, and the fact that it won’t even be available to half the workforce in a few years, this type of retirement plan carries high fees that eat into participants’ savings and investment portfolios that are predetermined by their employer. This means the types of assets they can buy are limited and might not fit their needs.

The modern worker needs a retirement plan that:

Moves with them from job-to-job-freelance-back to job.
Charges low fees so they can keep more of their savings.
Offers personalized investment options that can fit their diverse needs.
Is easy to use.
Is offered by their employer.

Icon is the Right Product Fit for the Modern Worker

Icon solves the problems inherent in a 401k for both the employer and employee alike.

For employers Icon:

Removes the fiduciary burden. Icon’s is an IRA-based plan so employers aren’t bound by ERISA regulations. Icon is an SEC-registered investment adviser and retains the fiduciary liability.
Removes the annual testing requirement. Again, since our plan is IRA-based, there are no non-discrimination rules to comply with.
Offers a turnkey retirement savings solution with a low, transparent fee structure.
Provides employee onboarding and education.
Provides companies with a clear and informative dashboard for easy plan monitoring.

For employees Icon:

Provides a portable retirement savings plan they never lost access to.
Provides high-quality, personalized and low-cost investment portfolios.
Provides access to a workplace retirement savings plan for every worker, even contractors.
Offers a clear and informative dashboard and app for easy plan management.
Gives them an easy and automatic way to save for their future.

Icon is the most cost effective way for companies to offer employees a retirement savings plan. If you’re interested in an alternative to the traditional 401k, reach out today.

Most Americans Report Feeling Financial Stress, But It’s a Solvable Problem

Posted on September 23, 2022 by Laurie Rowley - Retirement Benefits

Much has been written about the financial stress and anxiety the Covid-19 pandemic caused amongst the US workforce. And a recent study conducted by the Icon Retirement Innovation Research Center confirms that most Americans (63%) still feel stressed about their finances. But this phenomenon is not new. It was not created by the pandemic, just exacerbated by it. Instead, a lack of financial literacy and a workforce that largely lacks access to workplace retirement plans has steadily built the wave of financial stress Americans are experiencing today. Luckily, there is something employers can do about it, and Icon is here to help.

The Data

In 2021, FINRA (the Financial Industry Regulatory Authority) published a report on financial anxiety, stress and literacy in American workers. It collected its data between 2018 and 2020, when the economy was in expansion and the U.S. was experiencing record-low unemployment. Despite these favorable economic conditions, the study found results similar to Icon’s: that 60% of respondents felt anxious when thinking about their finances. More than half weren’t saving money and 20% had accumulated debt.

So during a period when individuals should have been able to improve their financial situation, more than half were not able to do so. Why? There are many factors that both FINRA and Icon found that correlated with problematic financial behaviors like lack of savings. But it’s a lack of financial literacy and access to a workplace retirement plan that are the two hurdles most people couldn’t overcome despite being completely solvable.

In terms of financial literacy, FINRA defined financial literacy as being able to demonstrate a basic understanding of financial terms like interest rates, inflation, and risk diversification. In their study, they found that 63% of financially illiterate people reported feeling financially anxious vs. 51% of financially literate respondents that reported feeling that way.

The FINRA study also found a link between low financial literacy and problematic financial behaviors like overdrawing their checking account and accruing expensive credit card debt.

What can Employers Do?

Employers can provide workers opportunities to save, starting with a retirement plan, and increase workers’ financial knowledge and awareness in the process. Why start with a retirement plan? Those feeling financially anxious are less likely to plan for retirement and need access to a plan through work. And retirement planning is a strong indicator of wealth and a good indicator of how savvy people are about how to use their resources.

Icon found that ⅔ of workers don’t trust their own financial decision making. So they look to their employers to help them save for retirement. If these workers are among the 81 million who lack access to a workplace retirement plan, they’re not likely to feel comfortable investing on their own.

The current 401k-dominant retirement system has created a wealth gap between those whose employer offers this benefit and encourages saving, and those who don’t have access to a retirement plan. The result is generational financial stress and illiteracy get passed down, making it very difficult for people to improve their financial situation.

How Icon can Help

The retirement system as it exists today is broken. It only covers W2 workers who have been at their company for a certain period of time and each 401k plan is an island unto its own. Meaning, 401ks can’t be connected even if they’re owned by the same person. The results are:

An estimated 80 million American workers don’t have access to a retirement plan.
There’s more than $1 trillion sitting in abandoned 401ks.
Over 20% of all 401ks are lost or forgotten.
There’s an estimated $3.68 trillion gap between what Americans will need in retirement and what they have saved.
Two classes of savers. Plans with larger asset balances pay lower fees than smaller plans, which means it takes employees of smaller companies longer to reach their financial goals than their counterparts at larger employers.

We need a new system to save for retirement and that’s exactly what Icon has built. Icon’s plan is a retirement savings benefit that enables employers to offer every worker, regardless of classification, a way to achieve financial stability. Our fees are transparent and the same whether you have five employees or 500. Our plans are also portable. This means workers never lose access to their retirement savings. When they leave your company, we simply “unplug” them from your system and “plug” them back into that of their next employer.

Employees want to save. They want to feel like they have more control over their finances and their future. Most also need their employer’s help in doing so.

What employees don’t want is to navigate a complicated and expensive system. They don’t want to have to read (and understand) complicated plan documents in order to discern how much they’re paying in fees and how they’re supposed to roll old accounts into new ones (or if they’re even allowed to do it). They want saving for retirement to be easy so they can focus on their actual job.

We’ve created a retirement benefit that allows them to do just that. Changing the tide of financial anxiety and illiteracy and lack of savings will take time and continuous effort. But with Icon, employers can help their workers invest in their futures and by doing so, show their workers the company is invested in them.

If you’re interested in learning more about Icon and how we can help you reduce your employees’ financial stress, reach out to a retirement specialist today.