How much does this cost?
We’ve simplified the Fidelity Advantage 401(k)℠ plan and passed the savings on to you and your employees.
That means you get a straightforward, low-cost pricing structure, which includes funding an employer match, with no surprises.
And that’s not all. You may also be eligible for tax credits for offering a 401(k) for the first time.
Now that we’ve covered the highlights of the plan costs, let’s review the details.
Employer & employee costs
We set this pricing structure to keep it simple, and we don't collect additional management fees, or with limited exceptions, fund expenses, from the investment options. Here are the costs:
Paid by employer
- Bullet $500 one-time fee for activation
- Bullet $300 per quarter for administration
Paid by employee
- Bullet $25 per quarter for recordkeeping
- Bullet 0.125% per account balance each quarter for investment service
Here’s how it works:
If your employee contributes $1000 for the year they could pay approximately $5 for this investment
service, which will be automatically deducted from their account.
For employers
You’ll be asked to add your bank account information during the onboarding process and then we’ll auto-debit quarterly for these plan costs.
Note: You will fund the company match separately, which will happen every pay period up to annual IRS limits.
For employees
These costs will be automatically deducted from their 401(k) account balance per quarter.
Employer match & tax credits
The maximum you could pay is 4% of all eligible employees’ gross compensation, but it is dependent on them enrolling in the plan and contributing the full 5% or more.
Here’s how it works:
The Safe Harbor match is a standard contribution formula where the employer matches dollar for dollar up to the first 3% of an employee’s annual compensation contributed to the plan, and 50 cents per dollar for the next 2%.
The employer match contribution will be funded via auto-debit and will be deducted every pay period up to annual IRS limits. And if an employee leaves the company during the year, they will still get the money they contributed and the employer match for that year.
There are many tax advantages to offering a 401(k). You may also be eligible to receive up to $5,000 in additional tax credits per year for the first 3 years when starting a new 401(k).
This tax credit is designed to help make the plan more affordable and offset start-up costs, while still giving you the chance to offer a 401(k).
Consult your tax advisor for specific information.