Was just looking for something like this. Will definitely hit you up!
Captain401 (YC S15) Wants to Make Creating a 401k Easier for Businesses
11–20 of 32 posts
Re: Captain401 (YC S15) Wants to Make Creating a 401k Easier for Businesses
#12Assuming 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?
From my experience costs for a 401(k) can be all over the board and the larger the plan the less the fees will be as a percentage of assets. I've seen as low as 20 bps and as high as 100 bps. The fees usually involve an advisor fee, a recordkeeper fee, and a custody and trust fee. A lot of providers provide all three services and bundle that into one fee. Some advisors use third party recordkeepers and a separate custodian and then all three parties bill separately.
Some companies will hit participant assets for all fees for the plan and then end up paying nothing themselves. I really dislike that practice as it kind of takes a lot of the benefit out of the benefit. :)
Re: Captain401 (YC S15) Wants to Make Creating a 401k Easier for Businesses
#13Having done this for a small biz (a) We spent about $5000 to set up with an attorney.
b) It's a !@%!@ nightmare to deal with the guy, with the taxes, etc. I would estimate 20 - 40 hours of set-up time for me, 1hr a month of ongoing paperwork and administration.
c) It's at LEAST $2500/yr to administer with the variety of little fees.
d) It's not straightforward for employees.
So suffice to say at $90/mo + $4 per this is a compelling offer.
Don't see anything specific about a "switching" opportunity - get yourselves a "switch to us" landing page and send me the link :)
Re: Captain401 (YC S15) Wants to Make Creating a 401k Easier for Businesses
#14The 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.
Can individuals customize their investments as well or is it all set at the company level?
Re: Captain401 (YC S15) Wants to Make Creating a 401k Easier for Businesses
#15My understanding was that employers have fiduciary obligations to their employees when they setup a 401k plan - does offloading 401k administration remove those obligations or transfer them to Captain401?
Re: Captain401 (YC S15) Wants to Make Creating a 401k Easier for Businesses
#16"The 401k is tied to dozens of Vanguard index funds"
Would be great if someone would offer self-directed 401k plans. In theory, they exist, but in practice, they're nowhere to be found.
Re: Captain401 (YC S15) Wants to Make Creating a 401k Easier for Businesses
#17My understanding was that employers have fiduciary obligations to their employees when they setup a 401k plan - does offloading 401k administration remove those obligations or transfer them to Captain401?
I cannot speak for Captain401 but employers (the plan sponsor) can transfer their fiduciary duty to their investment advisor by electing 3(38) services rather than the standard 3(21) services. That doesn't remove all of the obligations of a sponsor but does remove their fiduciary duty on investment selection and monitoring. The advisor usually does charge an extra fee for this but I think it is going to be a standard thing very soon as employers prefer to offload that liability.
Finally a topic on HN that I can speak about!
Re: Captain401 (YC S15) Wants to Make Creating a 401k Easier for Businesses
#18"The 401k is tied to dozens of Vanguard index funds" Would be great if someone would offer self-directed 401k plans. In theory, they exist, but in practice, they're nowhere to be found.
A lot of plans (well, a growing number) are now offering a self-directed brokerage account so that participants can opt out of the preselected investment options and pick their own. You should ask your H.R. department about adding that as an option.
Re: Captain401 (YC S15) Wants to Make Creating a 401k Easier for Businesses
#19I don't see an explicit mention on taking on the fiduciary role or not (there's a "taking care of compliance" mention as part of "Automated Administration"). A company I've considered (forusall.com) explicitly calls this out as "We take on the fiduciary role". If you're doing the same, it'd be great to make it clear!
Re: Captain401 (YC S15) Wants to Make Creating a 401k Easier for Businesses
#20What is the setup and/or recordation fee? The monthly fee is certainly competitive (and IIUC, I like that unlike ForUsAll you're not charging some sort of additional management fee), but I'd want to know what the upfront cost is.