Guideline launches new Starter plan, making 401(k)s even more accessible for millions of people

Today we’re proud to introduce our newest plan tier, Starter, as well as improvements to our overall offerings.

At Guideline, our mission is to help everyone arrive at a secure retirement. Building on the latest legislation, Starter is our most accessible plan yet, which we believe can help businesses of all sizes provide retirement benefits and help their teams save. And by adding even more flexibility to Core and Enterprise, we can better support companies as they grow.

Starter 401(k) plans could help millions save for retirement

In December 2022, Congress established a new type of retirement plan — the Starter 401(k) — as part of the SECURE 2.0 Act legislation. With more straightforward compliance and fewer employer requirements, the Starter 401(k) was designed to encourage more employers to offer retirement benefits to their teams.

The impact could be big: In fact, it’s estimated that the Starter 401(k) could help give retirement benefit access to over 19 million Americans. To continue to bridge the retirement gap, we decided to build a Starter 401(k) plan that’s low-cost and offers our seamless, easy Guideline experience. As an agile, tech-forward company, we’re proud to launch Starter within just 10 months of legislation being passed — the first to market.

Introducing Starter, a basic 401(k) with simplified features

At $39 plus $4 per month¹ per active participant, Starter is built to support businesses offering a 401(k) for the first time. For employers with 50 or fewer employees, the cost may even be free for the first three years after applying up to $16,500 in tax credits.²

Starter is our most simplified, out-of-the-box plan. It is exempt from IRS non-discrimination tests, which means it has fewer compliance requirements, but more limitations, including lower contribution limits and no employer contributions.

Leveraging recent legislation, here’s what our Starter plan includes:

• $6,000 employee contribution limit³
• Automatic enrollment with a contribution level of 3 to 15%
• No employer contributions allowed
• Must connect with eligible payroll providers, like Gusto and QuickBooks

While its features are more limited, Starter — along with all of our tiers — get the benefits of Guideline’s all-in-one experience, including:

• Automated plan administration, like recordkeeping, custodial services⁴, and guided employee onboarding
• 3(38) and 3(16) fiduciary services⁵, including filing IRS and DOL reports and signing 5500s
• Mobile app for savers to set up and manage their account  

But Starter isn’t the only thing we’re announcing today.

Introducing the new and improved Core, our most popular tier

Historically, our Core tier has been our most popular⁶ — and there are several reasons for that. Until today, Core has only offered Safe Harbor plans. While a Safe Harbor 401(k) can make compliance and administration easier, it also requires an employer match, which can be a barrier for some businesses. Based on feedback from our customers, we knew adding traditional 401(k) options (non-Safe Harbor) to Core could make a big difference for businesses.

Introducing the new Core tier: a foundational 401(k) with flexible plan design options. Core is a great fit for businesses of any size and budget that want to offer a meaningful benefit with larger contribution limits than Starter.

Core features include:

• $22,500 employee contribution limit³
• Safe Harbor or traditional 401(k) plan design options
• Optional features like employer contribution, vesting, and profit sharing
• Ability to connect with any payroll provider

We’ve continued to invest in our systems and infrastructure to add more flexibility while keeping costs low. With more optionality, Core puts more power in employers’ hands to help create the right plan for their businesses and teams.

Enhancing Enterprise, our most custom tier

In July we launched our Enterprise tier to support high-growth businesses with more complex requirements. Enterprise offers exclusive pricing options and premium support to help businesses scale from 5 employees to 500 and beyond.

And now, we’re adding more value to the employee experience for Enterprise customers with Participant Perks. Participant Perks are special offers on financial tools and services that can help savers create a well-rounded approach to financial wellness. We’re launching with four companies: Origin, Trust & Will, Playbook, and Beagle, and plan to announce more in the coming months.¹⁰

Supporting businesses and savers at every step of their retirement journeys

With these updates, we set out to help support companies at every stage: from offering your first 401(k) to upgrading your benefits program as your company grows. And while our plan offerings have changed, we’re still committed to our philosophy of straightforward, transparent pricing.

Guideline’s plans have low monthly costs and no transaction fees, which means employers don’t have to pay extra for plan setup, transfers, 5500 prep⁸, and more. For participating employees, our asset fees remain low at 0.15%, which is 7x lower than the industry average.⁹ This year we’ve also doubled-down on strengthening our saver experience — making Guideline 401(k)s more accessible than ever via a mobile app and more affordable by updating our fund menu with lower expense ratios.

If you’re wondering which Guideline tier best supports your business, here’s an overview of what you can expect from each when you offer a Guideline 401(k):

Today, over 44,000 businesses and hundreds of thousands of savers trust Guideline with over $10 billion in retirement assets. We look forward to continuing to support businesses and their teams on their road to retirement.

Disclosures:

¹ See our Form ADV 2A Brochure for more information on our fees

²  This content is for informational purposes only and is not intended to be taken as tax advice. You should consult a tax professional to determine what types of tax credits or deductions your company is eligible to claim.

³ Starter 401(k) annual limit is for 2024 and may be adjusted annually. Standard 401(k) annual limit is for 2023 and may be adjusted annually by the IRS to account for cost-of-living adjustments. Learn more

⁴ Guideline uses a third-party to provide custodial services. Custodial fees are paid by Guideline.

⁵ Guideline's 3(16) fiduciary services are only available to clients who utilize an eligible payroll provider.

⁶ Core is the most-selected Guideline plan as of September, 2023.

⁷ We require all plan sponsors transferring an existing 401(k) to Guideline to set up and maintain an Enterprise plan for at least one year before becoming eligible to switch to a different pricing plan.

⁸ Third-party auditor fees will apply to large plans where an audit is required. These fees are not charged by Guideline.

⁹ This information is provided for illustrative purposes only, and is not intended to be taken as investment or tax advice. Consult a qualified tax and financial advisor to determine the appropriate investment strategy for you. The average investment expense of plan assets for 401(k) plans with 25 participants and $250,000 in assets is 1.60% of assets, according to the 23rd Edition of the 401k Averages Book, with data updated through September 30, 2022, and is inclusive of investment management fees, fund expense ratios, 12b-1 fees, sub-transfer agent fees, contract charges, wrap and advisor fees or any other asset based charges. Guideline’s managed portfolios have blended expense ratios ranging from 0.064% to 0.067% of assets under management. When combined with an assumed account fee of 0.15%, the estimated total AUM fees for one of Guideline’s managed portfolios can be under 0.22%. Contact Sales at hello@guideline.com to learn more about exclusive pricing options available in Enterprise tier. Alternative account fee pricing is available ranging from 0.15% to 0.35%. Expense ratios for custom portfolios will vary. These expense ratios are subject to change by and paid to the fund(s). View full fund lineup.

¹⁰ Guideline is not affiliated, associated, authorized, endorsed by, or compensated by the companies listed herein, and their subsidiaries or its affiliates. Nor, does Guideline endorse or recommend any of the services or products marketed by these companies. Please contact a financial, tax, and/or legal advisor to determine if any of these vendors or their applications and products are appropriate for your specific circumstance.