Captain401 (YC S15) Wants to Make Creating a 401k Easier for Businesses

#1

Post by katm » Thu, Jul 30, 2015, 4:27 PM UTC

Captain401 (YC S15) Wants to Make Creating a 401k Easier for Businesses
techcrunch.com

Re: Captain401 (YC S15) Wants to Make Creating a 401k Easier for Businesses

#2

Post by zt » Thu, Jul 30, 2015, 4:54 PM UTC

This is a much needed service! At Standard Treasury we set up a 401k (no matching, we're a poor startup) through Zenefits, which ended up connecting with https://www.myubiquity.com/ (formerly theonline401k.com). Ubiquity has an unpleasant and unintuitive user interface, poor support, etc. I'm really glad to see a YC company taking on this space, it's worthy of attack.

Re: Captain401 (YC S15) Wants to Make Creating a 401k Easier for Businesses

#3

Post by 127001brewer » Thu, Jul 30, 2015, 5:04 PM UTC

The 401k is tied to a Vanguard fund, which Lee says ultimately leads to higher performance than other funds. ...

So there's only one (1) fund to available? I don't think that's necessarily a bad thing, but, if that's the case, what's the reasoning behind this?

Re: Captain401 (YC S15) Wants to Make Creating a 401k Easier for Businesses

#4

Post by roger_lee » Thu, Jul 30, 2015, 5:11 PM UTC

127001brewer wrote: post #3

The 401k is tied to a Vanguard fund, which Lee says ultimately leads to higher performance than other funds. ... So there's only one (1) fund to available? I don't think that's necessarily a bad thing, but, if that's the case, what's the reasoning behind this?

Thanks for pointing that out -- we're hoping TechCrunch will fix this shortly.

Our 401k actually offers dozens of Vanguard funds, and companies can even customize the investment options if they wish.

Re: Captain401 (YC S15) Wants to Make Creating a 401k Easier for Businesses

#5

Post by clamprecht » Thu, Jul 30, 2015, 5:11 PM UTC

127001brewer wrote: post #3

The 401k is tied to a Vanguard fund, which Lee says ultimately leads to higher performance than other funds. ... So there's only one (1) fund to available? I don't think that's necessarily a bad thing, but, if that's the case, what's the reasoning behind this?

I wonder if they mean 1 fund, or that it's just tied to Vanguard, and offers a set of Vanguard funds. Either way, good that it's Vanguard. Some other providers' fees are highway robbery.

Re: Captain401 (YC S15) Wants to Make Creating a 401k Easier for Businesses

#6

Post by erichurkman » Thu, Jul 30, 2015, 5:27 PM UTC

clamprecht wrote: post #5

127001brewer wrote: post #3

The 401k is tied to a Vanguard fund, which Lee says ultimately leads to higher performance than other funds. ... So there's only one (1) fund to available? I don't think that's necessarily a bad thing, but, if that's the case, what's the reasoning behind this?

I wonder if they mean 1 fund, or that it's just tied to Vanguard, and offers a set of Vanguard funds. Either way, good that it's Vanguard. Some other providers' fees are highway robbery.

Fee rate for my IRA funds in Vanguard funds? Around 0.18% or something close.

Fee rate for company 401k? 1.56%.

Fee rate for previous company's 401k? 1.8% plus monthly account fees plus rebalancing fees.

Re: Captain401 (YC S15) Wants to Make Creating a 401k Easier for Businesses

#7

Post by wdewind » Thu, Jul 30, 2015, 5:39 PM UTC

> Some companies like Fidelity don’t work with small businesses.

This is true and something we set out to fix at Justworks. Because we are a PEO we have tons of small customers that get access to 401k much earlier in their life cycle as a business than they would otherwise. For instance, we have some 2 person startups using Fidelity funds (as well as Vanguard etc.). The space is definitely ready for some innovation, though, so it's nice to see a YC company working on it.

Re: Captain401 (YC S15) Wants to Make Creating a 401k Easier for Businesses

#8

Post by BradRuderman » Thu, Jul 30, 2015, 5:51 PM UTC

Assuming a company doesn't match their employee's 401k, what is the cost for a company to offer a 401k, traditionally, and what is the approx cost using Captain401?

Re: Captain401 (YC S15) Wants to Make Creating a 401k Easier for Businesses

#9

Post by necubi » Thu, Jul 30, 2015, 6:13 PM UTC

Congrats on launching!

Re: Captain401 (YC S15) Wants to Make Creating a 401k Easier for Businesses

#10

Post by wj » Thu, Jul 30, 2015, 6:29 PM UTC

When they were on HN a few weeks ago I did not know they were a YC company.

I see another poster mentioned myubiquity.com which I was just looking at yesterday. One thing that stood out for me there is the questionnaire that a startup plan can go through to setup a plan. Gives them things they need to think about if they haven't already.

Best of luck Captain401! I like the use of the Vanguard index funds. We use those a lot (and in Vanguard managed trusts) and think that is a great decision to go with.

I just applied for the fellowship with an idea that leverages the 401(k) as a distribution channel for automated financial planning. Basically a portal that aims to deliver "financial wellness" to participants that combines budgeting, calculators, savings goals, facilitation of insurance and wills, etc. The portal would be offered to RIAs and plan sponsors as an add on service to their existing 401(k) service.

I hope that by getting better advice to people that addresses their current situation and their goals that we can help them form good financial habits. Retirement is the end goal but getting the people that live paycheck-to-paycheck a solid foundation right now will help them better be able to save down the line.