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Can a Small Business Payroll Service Offer Retirement Plans?

May 3rd, 2022 | 7 min. read

By CSI Accounting Staff

We’re all trying to retire. It doesn’t matter how much you love your job or feel a responsibility to run your business; everybody reaches the point when it’s time to place more value in the little things and enjoy the fruits of your labor.

Retirement plans and payroll services go hand-in-hand. When you’re searching for a payroll service, a big question that you should ask yourself is if they’re able to manage your employees’ existing plans

Maybe if you’re a newer small business, you’re looking for a payroll provider who can offer your employees retirement plans, but you’re concerned about what it may cost you - in time and money. Is it even possible for a small business to provide this kind of employee benefit?

While this article is specific to CSI Accounting & Payroll, you will find that many payroll providers follow similar processes with managing your retirement plans. However, the specific offerings through our 401(k) partner are not consistently found through other payroll solutions. Keep reading to learn:

  • If a payroll service can maintain your existing retirement plans
  • If it’s worth it for small businesses to offer retirement plans
  • If payroll services offer their own retirement plans

Payroll service paperwork explaining 401(k) retirement plans

Can My Payroll Service Maintain My Existing 401(k) Plan?

Some payroll services can manage the contributions on your retirement plans - and other payroll services can’t. Providers that are too small may not have the capacity to offer this service, whereas national providers may not be able to provide the customer service that’s required when errors occur.

Can CSI Manage My 401(k) Plans? 

If you would like to come on board with CSI’s payroll and would like to keep your current 401(k) provider, our payroll service will still work with them, provided they are not tied to your previous payroll provider. If they are tied to your previous payroll service provider, we can help you make the change away from that situation. Retirement plans tied to your financial planner can still be used with CSI.

What is CSI’s Process to Manage My 401(k) Plans?

To maintain your retirement plans through our payroll service, our payroll specialists will report your contribution amounts every pay period. While each 401(k) program’s process is different, this typically involves your dedicated payroll specialist manually entering the numbers or uploading files. 

Our retirement plan partner offers an integration that reduces manual work; it helps you automate processing employee contributions, adjusting any contribution changes, making personnel updates for new or prior employees, as well as assisting in completing year-end census and reporting. This relieves a lot of the administrative burden that would generally land on the plate of your already-busy admin or HR staff. 

Why Should CSI Manage My 401(k) Plan?

Rest assured, your retirement plan contributions and payroll are in good hands. CSI Accounting & Payroll has been serving small business owners for over 50 years, and our payroll division has been around for over a decade.

Our payroll specialists go through continuing education to ensure they are always aware of relevant laws and tax requirements – staying on top of the latest guidance from the Department of Labor and the IRS. Our payroll specialists also work under the same roof as our accountants, so relevant knowledge is easily exchanged. 

What If I Get Charged By My Current Provider If I Switch?

Large payroll providers are known to outsource their retirement plans and white label them as their own, where they have an on-staff financial planner who will typically deal with their retirement plan provider. 

When you try to switch to a new payroll provider, you may feel extra pressure to continue using their retirement plans because you will otherwise face high conversion fees. Luckily, our retirement plan partner reimburses a generous amount of these fees.

Should Small Businesses Offer Retirement Plans?

Maybe you don’t have retirement plans for your employees yet. With the cost of providing this benefit to your employees being an additional expense to you, you may wonder if it’s worth it to provide them as a small business. 

Here are three reasons why you may want to offer retirement plans:

  1. Attract and retain talent. Offering any 401(k), even without a match, is a great way to gain the attention of job applicants and to keep quality employees around. Both of those things can be hard to do at times! Profit sharing or an employer match can make it even more attractive.

    Consider the cost of offering a match versus how much money and effort it takes to constantly try to hire new employees or replace employees who leave. 

  2. They may be expected. Retirement plans are expected in certain industries that require higher education, such as small law practices. If you’re in one of these industries and don’t offer this benefit, your competitors who do offer retirement plans are more likely to hire and retain quality employees who may have otherwise worked for you.

  3. You, as the owner, will get retirement plan benefits as well. This alone should show the value in offering these plans as a small business. You get to help your employees, and you also get to help yourself in the process.

Ultimately, the choice is up to you. However, we believe these benefits make offering retirement plans worth it for most small businesses.

Do Payroll Providers Offer Their Own 401(k) Plans?

Many payroll providers do not offer their own 401(k) plans, but some work with retirement plan providers. You may also be able to provide retirement plans for your employees through a financial planner.

CSI is also a payroll provider that does not offer retirement plans directly, but we have a strong partnership with a retirement plan provider, Human Interest.

With CSI’s background in maintaining retirement plans for payroll clients and our excellent relationship with our retirement plan provider, we’re able to offer three affordable plan types from leading investment companies for you and your employees.

If you would like to start with Human Interest, we’ll simply provide them with your contact information and let them take it from there!

Finding a Payroll Provider to Handle Your Payroll and Retirement Plan Needs

Finding one provider that expertly combines several services to meet your needs, such as payroll and retirement plans, can feel like searching for a needle in a haystack. 

Making sure that you offer retirement plans can help with hiring and retention, and it also benefits you directly. Not to mention, retirement plans can sometimes be expected of a business.

As your journey searching for a combined service comes to an end, you now know that while other payroll providers can often manage 401(k) contributions as well, CSI also has a unique offering of retirement plan options through our partner, Human Interest.

If you’re ready to have a conversation about working with our payroll service to manage your retirement plan contributions, you can schedule a free consultation here.

Not ready to make the jump? That’s okay! You can read more about the cost of payroll services instead.

CSI Accounting Staff

This article was composed by a member of our staff who interviewed our experts to get the facts straight. Any uncited information found here came straight from a knowledgeable accountant or payroll specialist.