Top 5 Questions to Ask a PEO about 401(k)

February 28, 2019 Written by Oralie Chapman

In today’s job market, Hawaii employers need to offer a competitive benefits package to attract and retain top talent. One of the main benefits employees look for when deciding where to apply is a retirement plan like a 401(k). Saving for retirement through a 401(k) policy is also very beneficial to the business owner and current employees.


Despite the advantages, many small business owners feel overwhelmed or priced-out of setting up a 401(k) plan for themselves and their employees. The good news is that small business owners have a lot more options today than in the past; many Professional Employer Organizations (PEOs) now offer 401(k) administration.


Benefits of 401(k) with a PEO


Partnering with a PEO for 401(k) can take a huge burden off the shoulders of a small business owner. PEOS offer 401(k) administration at reasonable fees tailored to the size and needs of your business. On top of saving time and money, partnering with a PEO means having a professionally managed plan without the need to become an expert on retirement plans. PEOs offer retirement plans that strengthen your business.


The right PEO will be able to save your business time and money by handling plan administration and other HR tasks. If you are considering partnering with a PEO and are interested in a 401(k) policy there are some questions that you should ask.


Top 5 questions to ask a PEO about 401(k)


  • Is the 401(k) included as part of a bundled package? If so, ask for an overall cost breakdown to make sure that the price is in line with comparable services you could pay for separately.
  • Does the 401(k) service include a PEO recordkeeper and investment line-up? If so, ask for a breakdown of the recordkeeping and investment fees. All fees should be transparent so you know that you will be charged competitive rates.
  • Ask for details about the PEO’s investment line-up so you can compare fund costs.
  • Ask for a list of all tasks the PEO will handle for your 401(k) policy. Will it include establishing vesting, tax-deductible matching, and profit sharing contributions?
  • What liability will the PEO take on? Will they handle sending required notices, tracking employee eligibility and filing the Form 5500?


Partnering with Makai HR


No idea how to start a 401(k) policy? That’s okay; we’ve got you covered through HR outsourcing! When you partner with Makai HR you can get on with the business you are trying to grow while we take care of your employee needs from 401(k) plans to payroll, taxes, health insurance/benefits, and worker’s compensation. You also gain peace of mind that you are in compliance with all of Hawaii’s employer laws (if you’ve ever looked you know that the list is very long). When choosing a PEO to partner with, there are many things to consider including cost, services and technology solutions.


With the cost of doing business in Hawaii at record highs, we know how important it is to keep labor costs in line with revenue. Our plans are priced competitively and include value-added services like time-in/time-out systems. Our three tiers of PEO service plans are tailored to the size of your business and specific needs. We offer a 100% paperless solution which means that your employees can manage their needs through a computer, tablet or phone. We can truly improve your employees work benefits while freeing you up to run your business.


What are you waiting for? Companies who partner with a PEO benefit from 7-9% faster growth, 10-14% lower employee turnover; and they are 50% less likely to go out of business. Contact us today to get started!