As The 401k Plan Grows…

Jan 23, 2026

For business owners, sponsoring a retirement saving plan, like a 401k, can accomplish so much. 401k plans give owners and employees alike a way to save for retirement, enjoy tax incentives, and even leverage funds for emergency needs or a mortgage downpayment. Ideally, all these decisions are made with advice and educational support that is also provided through the 401k. With so much tied into the provision of this important benefit, it’s essential for plan sponsors to choose the right advisors and services for the plan. The good news is: there’s a plethora of advice and services available. The tricky part can be finding the right match. Read on for pointers.

Starting, Growing, Maturing…

Before sorting through available services for the 401k, it’s essential for plan sponsors to be clear about their needs and the kind of assistance that will be most helpful. Keep in mind that sponsors who are just getting their 401ks off the ground will have different concerns than those with more mature 401ks to run. As your business and retirement plan blooms and grows, knowing about the range of expertise available can make all the difference. For example, though the benefits of starting a 401k plan are many, it clearly takes effort to get a plan up and running. Since small business owners generally feel stretched thin for time and resources, the responsibilities associated with 401k plans can truly feel overly burdensome, as Rebecca Hourihan points out at 401k Specialist Magazine:

Small business owners wear many hats and often the retirement plan feels like just another burden. They’re pressed for time, concerned about cost, and skeptical that employees will value the benefit. Payroll integration and regulatory rules only make things more overwhelming….Owners may say:

“I don’t have the time to deal with a retirement plan.”
“This costs too much and it’s confusing.”
“My employees wouldn’t use it anyway.”

To ensure solid assistance from start-up to the $3 million level of the plan, Hourihan suggests service providers that have a strong focus on simplifying the tasks, while also inspiring employees about the value of participating. To “demystify the process and make the benefit feel achievable” Hourihan specifically encourages seeking support with:

Available tax credits
Easy onboarding, and face-to-face employee support
Tools like a “Startup Plan Launch Checklist”
a “Welcome to Your New Plan” participant flyer

Once over the challenges and worries related to starting up a 401k, plan sponsors tend to find themselves wondering about how to ensure it thrives and actually results in benefits to all participants. Hourihan points out that at the $3-$10 million mark, retirement plans are indeed much more visible, and suggests related ways that plan advisors can be of further service:

Employers now face fee benchmarking pressure, compliance oversight, and employees asking questions HR can’t always answer. They’re also considering enhancements like Roth catch-up contributions or auto-enrollment but may feel uncertain about implementation. Common sponsor sentiments include:

“How do I know we’re paying fair fees?”
“We should probably add features like Roth, but I’m not sure how.”
“Employees keep asking questions I can’t answer.”

Here, advisors can add value by talking about plan costs (benchmarking), delivering fiduciary education, and providing plan design comparisons. Campaigns that showcase expertise like webinars on plan design enhancements or newsletters focused on compliance basics, that builds your trust and credibility.

According to Hourihan, when a retirement plan grows to the $10-$50 million level, “governance becomes the buzz word,” and “committees want structure, charters, and confidence that fiduciary duties are being fulfilled. HR leaders are also under pressure to show measurable outcomes.” At this level, plan sponsors are likely to find that “advisors who can provide governance playbooks, benchmarking scorecards, and retirement readiness metrics will stand out.”

Outsourcing Fiduciary Responsibility?

While carefully outsourcing the advice and services important to the success of a 401k plan is a wise plan sponsor move, don’t make the mistake of assuming this releases you from your ERISA fiduciary responsibilities.Though plan sponsors can reduce their risks through outsourcing, the inherent, legally binding, obligations of the plan sponsor to the plan and its participants are never eliminated. Retirement plan sponsors and other fiduciaries, like committee members, retain responsibility (and liability) for their decisions, including decisions made about outsourcing. Groom Law Group’s David Levine underscores that when contracting with outsourced advisors, it is critical for plan sponsors to be absolutely clear on this question: “What am I actually hiring for and what am I still owning?” For example, under the high standards of ERISA, monitoring and evaluating remain essential obligations of retirement plan fiduciaries,

Given their ERISA obligations, another wise move for 401k plan sponsors is obtaining fiduciary liability insurance: the only type of coverage that provides protection for personal assets in the face of allegations of fiduciary oversights. Colonial Surety Company makes it easy and affordable for plan sponsors to protect themselves with Fiduciary Liability Insurance. We even include basic Cyber Liability Insurance, which explicitly covers your business and plan–at no extra cost. With our efficient Fiduciary+Cyber Liability Insurance, for a few dollars a day, you’ll be armed with:

Up to $1,000,000 for Defense and Penalties: If faced with alleged or actual breaches of duty in connection with the employee retirement plan, you’ll be defended, and your assets protected.
Cybersecurity Response Services: You are obligated to mitigate cyber threats to the plan. Our coverage includes an expert response plan as recommended by the Department of Labor.
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Fiduciary+ Cyber Liability Insurance for Plan Sponsors

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