Accessible 401(k) plans for small businesses and nonprofit organizations.
A typical 401(k) plan requires day-to-day administration and has annual testing and tax filings. Hiring knowledgeable outside expertise to assist with these responsibilities is a common practice, but this means often paying annual administration fees, which can be difficult for smaller businesses or nonprofit organizations.
Saturna Trust Company offers a way for small businesses and nonprofit organizations to come together to provide retirement benefits to their employees and members without these burdens of additional administration or high costs.
Saturna Trust Multiple Employer 401(k) Plan: an affordable retirement plan option with reduced fiduciary liability.
Multiple Employer 401(k) Plans
A Multiple Employer Plan allows businesses or organizations to join a common plan together, so long as they are members of a trade organization or chamber of commerce that is sponsoring the plan. These members must either be in the same industry or profession, or be located within the same state or city.
The key advantages of Saturna’s Multiple Employer Plan include:
Flexible Plan Design
Although all participating employers are part of the same plan, each has the ability to choose its own unique plan features, such as vesting, matching formula, eligibility, and more.
Reduced Administrative Burden
Only one Form 5500 is filed for the entire plan each year, so individual employers do not have to worry about this requirement. Additionally, if an audit is required, there is only one audit for the entire plan.
Reduced Fiduciary Liability
The sponsoring organization assumes the liability for the plan’s overall design, investment menu, and reporting requirements.
Because so much of the administration and reporting is aggregated, the fees for operating this type of plan are much lower than if each employer were to establish their own separate 401(k) plan.
Is a Multiple Employer 401(k) Plan Right For You?
A Multiple Employer Plan may be right for you if your organization is not currently enrolled in an affiliated or group retirement plan, and you are looking for reduced administrative burden and reduced fiduciary responsibility.
For employees, the typical administration and account activities will function just as a standard 401(k) account would, with access to a variety of investment products and client account services.
Our Payroll Integration service allows you to connect your 401(k) plan directly to your payroll system, eliminating administrative burden by combining tasks helping you to remain in compliance through making your 401(k) plan easier to manage.
For a low, flat-rate fee, the Saturna Payroll Integration service creates a seamless flow of information between your employees and Saturna Trust Company, your plan’s recordkeeper and third party administrator.
3(16) Fiduciary Plan Service
With our 3(16) Fiduciary Plan Service, Saturna Trust Company takes on a majority of the adminstrative functions required to manage a 401(k), and is a required service when implementing a Multiple Employer Plan. The 0.05% annual asset-based fee for 3(16) Fiduciary Plan Service will be waived for Multiple Employer Plans.
There are hundreds of responsibilities and duties involved with managing a 401(k) plan. By engaging Saturna as a 3(16) Fiduciary, we will actively manage the day-to-day administrative responsibilities of your 401(k) and ensure that Plan Sponsors understand their responsibilities. Saturna will work with Plan Sponsors to develop a specific plan so that there is clarity on which duties fall under the responsibility of the 3(16) Fiduciary and which duties are retained by the Plan Sponsor.
- Signing Form 5500 and Form 8955-SSA
- Direct delivery of annual notices and disclosures to plan participants
- Determining employee eligibility
- Working directly with the Department of Labor in the event of an unscheduled audit.
- Approving Loans, Distributions from the plan
Saturna Trust Company has designed a fee structure that not only passes on the savings that accompany reduced administrative work to participating employers, but also provides a way for the sponsoring organization to recoup the costs of offering and operating the plan. Depending on the number of employers that join the plan, the sponsoring organization may even make a profit for offering this highly sought-after benefit to its members.
Because a Multiple Employer Plan consolidates much of the work typically involved in maintaining individual plans, the association of employers that sponsors the plan will enjoy lower overall fees that reflect this reduction in work. This allows individual employers to offer a retirement benefit without an additional financial burden. Their employees will also experience savings, which may allow their 401(k) accounts to grow more quickly.
The sponsoring organization will pay a flat fee annually to Saturna Trust Company for administration of the plan. The flat fee will increase based upon the number of employers that join the plan. To recoup this cost, the sponsoring organization may charge a fee to each employer that joins.
An example of how the sponsoring organziation may charge Multiple Employer Plan member organizations is below:
|Flat Fee to Sponsor||Number of employers joined|
|$1,000||1-5 (4 employers needed to break even)|
|$2,000||6-10 (8 employers needed)|
|$3,000||11-15 (12 employers needed)|
|$5,000||26-50 (20 employers needed)|
|$7,500||50-100 (30 employers needed)|
|$10,000||Above 100 (40 employers needed)|
The fee an organization charges to employers in the plan used in the example is $250 per member organization. The table above is for illustrative purposes only. Actual fees charged to member organizations are at the discretion of the sponsoring organizations.
Additionally, Saturna Trust Company will charge an annual asset-based fee. This fee is charged to plan participants (employees) and is only charged on investments that are not Saturna-affiliated. The asset-based fee will decrease as pooled non-Saturna assets grow:
|Asset Fee (on non-Saturna funds only)||Pooled non-Saturna fund Assets|
|0.40%||$0 to $5 million|
|0.25%||$5 million to $20 million|
|0.15%||$20 million to $50 million|
|0.10%||Above $50 million|
Fee is a flat rate (no limit on number of employees), per pay period, and billed annually.
|Payroll Integration Services||$30 (per pay period)|
Employees (plan participants) are charged a percentage of their investments in non-Saturna funds. The percentage they are charged is based on total plan assets held in non-Saturna funds.
|Affiliated mutual fund trading||None|
|Plan menu fund trading||None|
|Mutual fund expenses||Please see a Fund’s summary prospectus for details.|
|Loan initiation fee (if allowed)||$60|
|Quarterly loan fee (if allowed)1||$15|
1 A quarterly loan fee of $15 ($60 annually) is charged only to those participants who have an outstanding loan, if loans are allowed by the plan.
Most recordkeepers accept payments from funds in plans (often referred to as “revenue sharing”). Saturna Trust does not.
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