Financial News
Empower Readies New Digital Solution to Help Small Employers Create 401(k) Plans
- Leading the way to ‘eliminate’ the retirement access gap in the U.S.
- Public policy, technology driving new plan formation to expand retirement system
Empower today is unveiling new plans to launch a digital solution that will remove access barriers and give more small employers the ability to establish workplace retirement plans for their employees.
Launching mid-2024, the new 401(k) offering presents advisors and third-party administrators (TPAs) with a new means of setting up a retirement plan with an employer that reduces complexity and cost while streamlining administrative duties. The new program — called Ready Select — is designed for small and start-up plans with up to $1 million in assets.
Historically, complexity and administrative burdens have presented barriers to the creation of workplace retirement plans for small employers and start-up companies. Management teams are often busy with the needs of growing their business, and taking on the additional work of providing retirement benefits can be daunting. According to the Small Business Administration, there are an estimated 33.2 million small businesses in the United States and approximately 62 million individuals who work for these employers.1 These employers represent many of the estimated 33 percent2 to 50 percent3 of private sector workers who are not currently covered by a workplace retirement plan.
“This game-changing innovation from Empower delivers retirement services to more American workers who deserve the chance to have a secure retirement,” said Empower President and CEO Edmund F. Murphy III. “The time to eliminate the access gap is now, and we’re taking this head on.”
“We have the technology, the know-how and the support of advisor and TPA partners to address this problem for the millions of Americans who need a retirement plan,” said Murphy.
Murphy applauded the public-private partnership that is inherent in the nation’s workplace savings system, which has played a critical role in helping to narrow the access gap.
In recent years, Congress has passed legislation known as the 2019 SECURE Act and the 2022 SECURE 2.0 Act, which have made retirement plans more accessible to more workers. For example, the retirement plan coverage rate of the lowest-income families increased by 25% during the three-year-period of 2019-2022 — more than double the growth rate of any other income segment during the period, including years immediately following the enactment of the SECURE Act of 2019.4
“Together, Congress and retirement industry advocates have created terrific improvements that create the opportunity for workplace retirement plans to become much more accessible,” said Rich Linton, President and Chief Operating Officer at Empower. “We know that through highly effective public policy and on-going investments in innovation we can further reduce employer burdens and take down barriers of entry into the retirement system,” said Linton.
Ready Select from Empower
Ready Select offers a streamlined, end-to-end 401(k) plan set-up process that simplifies plan features and design decision points. The system includes integrated investment advisory services through a third party ERISA fiduciary. The new application helps to reduce the implementation timeline, financial and administrative cost of sponsoring a 401(k) plan for small employers, so that advisors can help business owners spend less time administering their workplace benefits.
After working with an advisor or TPA to generate an on-demand proposal and complete plan setup, small business owners and employees gain access to the same award-winning digital experience, financial wellness, and education programs that Empower provides to some of the nation’s largest corporate, non-profit, and governmental plans.
Ready Select derives its name from Empower Select, a market-leading plan solution that pairs time-saving service and administrative features, with a comprehensive marketplace of investment products.
“Advisors and TPAs who use Ready Select will have the ability to help support small employers with cost-effective retirement plan choices that best meets the needs of their workforce,” said Executive Vice President for Core Markets for Empower, Joseph Smolen, Governing Board Chair of the SPARK Institute, a retirement industry advocacy organization. “These partners know how to help employers and Empower stands ready to help them bring their know-how to new plans.”
About Empower
Recognized as the second-largest retirement services provider in the U.S.5 by total participants, Empower administers approximately $1.5 trillion in assets for more than 18.5 million investors6 through the provision of retirement plans, advice, wealth management and investments. Connect with us on empower.com, Facebook, X, LinkedIn, TikTok and Instagram.
- Small Business Administration Office of Advocacy: Frequently Asked Questions About Small Business 2023.
- Bureau of Labor Statistics, March 2023: EBS Home : U.S. Bureau of Labor Statistics (bls.gov).
- Center for Retirement Research, Boston College, 1989-2022: Closing the Coverage Gap – Center for Retirement Research (bc.edu).
- The Federal Reserve, Survey of Consumer Finances, 1989-2022. The Fed - Chart: Survey of Consumer Finances, 1989 - 2022 (federalreserve.gov).
- Pensions & Investments DC Recordkeeper Survey (2023). Ranking measured by total number of participants as of September 2022.
- As of December 31, 2023. Information refers to all retirement business of Empower Annuity Insurance Company of America (EAICA) and its subsidiaries, including Empower Retirement, LLC; Empower Life & Annuity Insurance Company of New York (ELAINY); and Empower Annuity Insurance Company (EAIC), marketed under the Empower brand. EAICA’s consolidated total assets under administration (AUA) were $1,544.5B. AUA is a non-GAAP measure and does not reflect the financial stability or strength of a company. EAICA’s statutory assets total $72.1B and liabilities total $68.3B. ELAINY’s statutory assets total $7.2B and liabilities total $6.9B. EAIC’s statutory assets total $92.0B and liabilities total $91.0B.
Securities, when presented, are offered and/or distributed by Empower Financial Services, Inc., Member FINRA/SIPC. EFSI is an affiliate of Empower Retirement, LLC; Empower Funds, Inc.; and registered investment adviser Empower Advisory Group, LLC. This material is for informational purposes only and is not intended to provide investment, legal, or tax recommendations or advice.
Empower refers to the products and services offered by Empower Annuity Insurance Company of America and its subsidiaries. “EMPOWER” and all associated logos and product names are trademarks of Empower Annuity Insurance Company of America.
©2024 Empower Retirement, LLC. All rights reserved. WF-3267103-0324 RO-3471208-0324
Learn more:
To learn more about how we’re empowering plan sponsors and their participants to be more engaged in their retirement plans than ever before, call us at 800-719-9914.
View source version on businesswire.com: https://www.businesswire.com/news/home/20240327792249/en/
Contacts
Stephen Gawlik - Stephen.Gawlik@empower.com
Mandy Cassano - Mandy.Cassano@empower.com
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