Outsource Your 401(k) Plans Too!

If you're not planning to outsource all of your HR functions, or are outsourcing them piecemeal, consider that the 401(k) employee retirement benefit can be especially tricky for small firms.

It's hard to find third-party providers who will service the very small companies (fewer than 25 employees). And for those with fewer than 100 employees, it can be fairly expensive — until recently, there were only high-cost plans that charge high maintenance fees, which makes it burdensome for employers and less attractive for employees wanting to save as much of their hard-earned money as possible.

But that's starting to change as more vendors, old and new, offer Web-based plans for small companies that are trying to administer this themselves. Sharebuilder is one such offering (more are listed in this section). The company, which has provided online investing to individual investors since 1999, recently expanded into the small business market by providing an online 401(k) progam. The company is targeting companies with fewer than 100 employees, says Stephan Roche, vice president and general manager of Sharebuilder's small business group. "Eighty-five percent of small businesses today have no 401(k)," he says. "These small businesses are just as underserved as small investors are."