Bank of America has introduced a 401(k) retirement plan for small businesses through its Merrill Edge unit.
The new offering provides small business owners, who generally have 401(k) plan assets under $250,000, a simplified retirement plan with lower costs than many traditional 401(k) plans, enabling small businesses to provide an important benefit to their employees.
“We know how important small businesses are to our nation’s economy and how dedicated their owners are to their employees,” said Robb Hilson, Bank of America Small Business executive. “Offering a simplified 401(k) plan, designed to address the needs of small business owners and their employees, is yet another way we are showing our commitment to supporting small businesses.”
According to a recent U.S. Government Accountability Office report, only 14 percent of small business employers (those with up to 100 employees) offer a retirement plan to their employees. Based on interviews with small employers, the report cited plan complexity, administrative burdens and carrying out fiduciary responsibilities as among the key barriers to sponsoring retirement plans. The Merrill Edge Small Business 401(k) has easy-to-understand pricing that is generally lower than many traditional 401(k) plans. BofA said that small business owners would be able to easily maintain the online plan while they stay focused on running their businesses, and give themselves and their employees the opportunity to pursue a successful retirement.
The plan provides a streamlined investment menu selected by Morningstar Associates, LLC, who assumes investment fiduciary responsibility and simplifies the fund selection process for clients, while helping take the guesswork out of fund selection for employees. Online resources and education help employees start their retirement investing and then stay on track. BofA is also providing support by phone from 401(k) specialists to help employees make informed investment decisions. Employees also get access to daily online statements and account performance details.
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