SECURE 2.0 made it easy(er) for small businesses, in particular, to start and fund a retirement plan. Whether through the Starter 401(k), small employer tax credits, and other incentives, proponents hope keeping it simple will close the coverage gap.
Digital 401(k) provider for small and medium-sized businesses, Human Interest, is entirely on board—unsurprisingly.
This week, the San Francisco-based firm said it has introduced Fast Track 401(k), a “radically simplified way for small and medium-sized businesses (SMBs) to purchase and design a new 401(k) plan.”
The firm said Fast Track 401(k) is a response to what it claims are the onerous and expensive setup processes created by legacy retirement providers.
“Many SMB owners have been reluctant to start a retirement plan because it requires making an overwhelming number of choices and wading through dense industry jargon and acronyms,” it said in a statement. “The decisions made when setting up a plan have a material impact on administrative burden, fiduciary liability, and risk of penalties, but it can be challenging for first-time 401(k) buyers to understand these nuances and consequences. This complexity adds yet another stressor to small business ownership, leading to inaction or the potential for costly financial implications down the line.”
Fast Track 401(k) recommends common and compliant plan designs in keeping with SECURE Act 2.0, and the company claims it takes as little as 10 minutes for sponsors to set up a plan.
“We spent months researching the needs and challenges of first-time 401(k) buyers and learned that most grapple with anxiety and indecision when required to answer a long series of convoluted questions with little knowledge or confidence,” Kristina Wallender, Chief Experience Officer at Human Interest, said. “We’ve created a simplified experience that replaces 401(k) jargon with common language, guides users to commonly chosen plan options, and provides contextual guidance to help administrators make confident choices. With Fast Track 401(k), we’ve removed the hurdles that prevent small businesses from starting a new plan.”
The new release comes on the heels of a June announcement in which Human Interest said it would offer a 3% cash-back reward to participants who start saving for retirement. The cash incentive is designed to increase participation rates in employer-sponsored retirement plans by helping to address near-term financial stressors.
Essentially acting as a match, the San Francisco-based company said the incentive is available to all eligible participants on its platform “making at or below the U.S. median wage of $60,000, putting cash directly in the wallets of American workers who need it most.”
Additionally, all Human Interest plan participants will get access to (k)ickstart, its financial wellness program.
