The new plan is a boon for small businesses
The Washington Technology Industry Association (WTIA) is adding a 401(k) Multiple Employer Plan to its benefits suite. It offers retirement options usually only available at big companies.
“From a recruiting standpoint, it’s huge,” said Dave Parker, CEO of Seattle-based Code Fellows. “It really allows us to be competitive without having to have the expense and overhead of trying to do it ourselves as a small company.”
Code Fellows is a coding boot camp company that is on track to graduate more than 300 students this year. It’s a small company made up of 35 employees — including instructors. Parker said the WTIA’s 401(k) option allows Code Fellows to offer “big company benefits.”
The way the WTIA plan works is, from a government-reporting standpoint, the grouping of employers is treated as one large, overarching plan. A high-value plan is available to employers through strength in numbers.
About 86 percent of organizations with less than 100 employees do not offer a 401(k) plan, according to numbers from the Government Accountability Office provided by the WTIA. Often, for small businesses, the HR workforce isn’t available to handle a retirement plan.
“Most small to mid-size companies dream of offering a 401(k) to their employees, but the time it takes to manage the administrative side of things often turns that vision into a pipe dream,” Michael Schutzler, CEO of WTIA, said in a news release.
The WTIA is partnered with Empower Retirement, allowing companies to offload the work of investment selection, employee education, customizing to individual needs, and fund monitoring.
Parker said when beginning a startup, a 401(k) is usually not the most important thing for a company to put in place, so the WTIA offering this checks off a box that is often down the list.
“On my top 10 list of things to do as a startup (a 401(k) is) not in my top 10,” said Parker. “Taking care of people is always in the top 10. So, if there’s an easy solution to take care of people then add this to it, that’s where it feels like, ‘Yeah, this totally works.'”
Code Fellows has announced the 401(k) option to its employees, many of whom are excited to take part.
“We’re encouraging all of our employees to make the most of the program,” he said.