Outsourcing HR needs to a third-party organization, also known as a "Professional Employer Organization" (PEO), is standard practice for small and mid-sized businesses. Relying on an independent organization frees up in-house resources and streamlines tedious HR processes. Processes such as employee onboarding, legal compliance, payroll, workers comp, and other benefits, including retirement plans, can all be handled by your PEO. But, should it?
When it comes to retirement plans, it's always a good idea to get a second opinion. Seeking consult from an independent 401(k) adviser exposes you to the other available market-leading offers. This way you'll know what's available to you. But it's most certainly worth exploring what your PEO can do for your employees' retirement plans too. For instance, it will help your company access lower rates with its network of clients' combined purchasing power. That means your company will access lower rates across almost every benefit category.
One of the benefits of consulting a 401(k) adviser is that you'll better understand the 401(k) fees, which you have a fiduciary responsibility to track. While accessing several low market rates across almost every benefit category sounds amazing, minute details are often lost when multiple benefit packages are bundled together. And in some cases, the bundles themselves do not offer a better value than leading market options. The only way to find out is by doing your research and comparing your options.
It's also worth noting that it's not uncommon for a PEO to offer integrated payroll that automates tedious tasks like calculating hours worked or various tax deductions. These integrations streamline your operations, decrease expenditures, and ultimately make your life easier. As you decide whether to use your PEO for your employees' retirement plans, keep in mind that your company has a legal obligation to maintain and monitor its compliance with the Department of Labor. Fortunately, many PEOs cover almost all of these administrative services. Not all PEOs, however, are built equal. To ensure sufficient compliance, you'll want to partner with a PEO that offers a 3(16) Fiduciary service.
The bottom line is that PEOs are a great way to cut costs, streamline operations, and increase revenue by offering your employees the best benefits like an incentivizing 401(k). So explore your options and book a demo with the PEO of your choice today!
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