According to Southern California-based (401k) Enginuity (www.401kenginuity.com),twenty-year veteran in developing and running 401(k) administration and 401(k) software and recordkeeping systems, the Internet will be the primary delivery system for 401(k)s by 2007. Many web-based 401(k) plans will run on administration and recordkeeping platforms that plan providers will outsource to 401k specialists and 401k Application Service Providers (ASP).

The advantages of web-based online 401(k) plans are obvious to today's workers, and include use conveniences, real-time monitoring and reporting, and instant re-allocation of their retirement assets. The internet has also dramatically reduce the cost of 401(k) plan administration, saving plan sponsor 50% or more in ongoing fees and costs when compared to the older traditional labor-intensive plans. Outsourcing of 401(k) functions by plan providers will extend the trend towards lower cost, high-quality 401(k) products.

Taking a page from popular do-it-yourself business software such as Intuit's QuickBooks®, 401(k) Easy is a software-driven, in-house system that addresses every aspect of the user's needs -- in this case 401k plan administration. Routine administrative tasks, such as processing monthly 401k contributions and running monthly compliance tests, as well as less routine ones, such as compliance test corrections and distributions, are understandable and simple to do.

The 401(k) Easy system contains all the popular features and offerings found in conventionally administrated plans, and then some: MONTHLY employee statements as well as MONTHLY compliance testing are just two of 401(k) Easy's automated functions not available or provided only for an additional fee in most out-sourced plans.

With 401(k) Easy much of the expense and delay associated with traditional 401k plans is removed because the third-party administrative middleman is removed. Instead, the employer owns the tools the middleman uses (software plus companion materials), takes care of the processing in-house and sends 401k contributions directly to the mutual fund company or participant-directed brokerage accounts housing the plan's investments. No third party ever clutters up the processing cycle; no third party ever takes constructive receipt of any plan assets at any time.

401(k) Easy companies save money (25% to 80% and more; cost depends on plan size, averaging roughly $20 per participant per year, with discounts given for plans using load mutual fund investments; plans using Class B funds are free, except for the $500 one-time plan setup fee charged to all new plans). 401(k) Easy companies assure their plan participants fast, easily-accessible service because it's in-house. 401(k) Easy companies can provide their plan participants with account statements every month (the software does all the work) and keep their plan healthy with compliance testing every month (also fully automated and completed in seconds!).

The 401(k) Easy system includes an IRS-approved prototype 401k plan customized to the employer's needs, the employer's choice of plan investments (participant-directed brokerage accounts, no-load and load mutual fund families are available), plan-customized administration software and companion materials, 401k literature for plan participants, a User's Guide that explains what the employer needs to do and how to use the 401(k) Easy system to do it, 401k-related IRS reporting forms and assistance, and free help getting things going -- and everything (except investments and investment performance) is covered by a 30-day money-back guarantee. Two optional features will be available for an additional fee: a Payroll Software Upgrade that enables direct data transfer from the employer's payroll software into the 401(k) Easy software, and a Company Stock Upgrade that lets companies offer their listed stock as a plan investment option.

Because 401(k) Easy works for any number of participants from six on up, it is especially inviting to smaller businesses. Until now, the combination of price and minimum participation standards has prevented many smaller businesses from adopting traditional 401k plans. In the future, they may not even have the opportunity: many 401k providers are pulling out of the 200-participant-or-less market due to administrative costs that are relatively high in comparison with the revenues the plans generate for vendors.

Because 401(k) Easy allows for participant-directed brokerage accounts, companies of all sizes with personnel who are comfortable using the internet and computer-based information and who like hands-on control over their investments will find the 401(k) Easy do-it-yourself system especially attractive. 

Company owners find 401(k) Easy attractive because it saves them money while providing them with a quality plan, customized to their needs. The employer selects the participation requirements, employer matching contribution rate (if any), vesting rate for matching contributions (if any), plan investment choices and more for its plan. Free help is available. Decisions are then hardwired into the a custom software package, and all processing functions conform to these plus IRS-regulation embedded parameters. RRP

The 401(k) Easy system is updated each year in light of regulatory changes. Relevant governmental regulations are hardwired into the program and applied to compliance testing and other processing functions; clients receive updated copies of both software and companion materials upon renewal. Data is seamlessly transferred from the previous year's program into the current one during installation.

401(k) Easy is backed by a 30-day money-back guarantee; we cannot, however, guarantee the investments nor their performance, but investments are SEC-regulated and offered by known investment companies.

401(k) Easy can be put to work for new or already-existing 401k plans. For more information or to download a free sample copy of the 401(k) Easy software, visit www.401keasy.com or call 1-800-660-0050.

Two additional non-profit websites that include relevant unbiased information about 401k plans include www.401k-online.net and www.run-it-yourself401k.com.

401(k) plan providers of all types, financial institutions including banks, insurance companies, brokerages, mutual fund companies, credit unions, and third-party administrators, are now actively outsourcing 401(k) administration and recordkeeping tasks to 401(k) ASPs --- vendors such as 401k Enginuity, whose sole function is to maintain, updated and supervise software-based 401(k) administration and recordkeeping systems on behalf of plan providers. 401(k) ASP vendors are responsible for all routine day-to-day 401(k) recordkeeping and administration functions, thus allowing the plan providers to reduce internal staff, eliminate the expense and complications of licensing, housing and running hardware and 401(k) administration software in-house. Plan providers can refocus and concentrate their efforts on to the needs of their plan sponsors and plan participants, and rely upon the outsourced ASP 401(k) vendor for the recordkeeping and technical "backbone" supporting providers' Internet-based plans. It is inevitable that some of this 401(k) outsourcing to ASPs will include secondary outsourcing of certain non-critical low-level routine day-to-day tasks to non-US locations, where labor costs are less yet the expertise is abundant.

For more information/comments: comments@401k-office.com