401k / Retirement

Question 1

Who are our four main 401(k) partners?

Answer 1

Guideline (preferred)
Vestwell
Betterment
Human Interest

Question 2

Can businesses who already have a 401(k) provider sync their current plan directly to Gusto?

Answer 2

Yes, but only available for select providers/integrations.

Other providers: Fidelity, Empower, Transamerica, Ascensus

Question 3

Three Types of 401(k) plans

Answer 3

Traditional: Pre-tax deduction

Roth: Post-tax deduction

Safe Harbor

Safe harbor is a legal term that exempts a person or company from certain regulations if they meet other requirements. A safe harbor 401(k) allows employers to skip the nondiscrimination tests that most 401(k) plans are subject to. Nondiscrimination tests are intended to ensure that plans do not discriminate in favor of highly-compensated employees in terms of employer matches or other benefits. Because safe harbor 401(k)s are easier to administer, they are especially popular with small businesses.

In return, employers with safe harbor 401(k)s must make annual contributions to every eligible employee’s plan, regardless of whether the employees themselves contribute. In addition, that money is immediately vested, regardless of how long the employee has been with the company.

Especially popular with small businesses because they are easier to administer. Employers must make annual contributions to every eligible employee’s plan, regardless of whether the employees themselves contribute.