Products October 17, 2018

Human Interest Launches Partner Program Portal

The automated 401(k) provider says its new Partner Portal is designed to serve as the user interface for partners to more efficiently manage their client referrals.

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Human Interest, a provider of “automated 401(k) plans” based in San Francisco, announced the launch of a new Partner Program, including an integrated Partner Portal.

According to the firm, the Partner Portal is designed to serve as the user interface for partners to manage their client referrals. The portal, the firm says, is now “fully integrated into the Human Interest Partner Program and is designed to enable Human Interest partners to easily set up and manage a fully-automated and online retirement solution for their clients.”

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The solution is tailored for financial advisers, benefits consultants and brokers. These professionals can can participate in the Partner Program by signing up online.

“With access to the Partner Portal, Human Interest partners have the ability to refer small business clients, track statuses on client referrals, manage revenue share agreements, and update contact, payment, and other user information,” a spokesperson for the firm says.

Roger Lee, Human Interest CEO and co-founder, says the portal improves partners’ ability to provide small business clients with a 401(k) experience that is optimized and enhanced for their specific business strategy.

According to Lee, the portal promotes a “modernized 401(k) approach” and features back office support for new plans, help with revenue sharing and assistance with meeting fiduciary responsibilities.

Advisers to 403(b) plans can also leverage the portal, according to the firm.

Data & Research October 17, 2018

Education About Tax Treatment and Fees Could Boost 401(k) Participation

Findings from a Capital One survey about why employees do not participate in their employer-sponsored retirement plan offers opportunities for education, according to Stuart Robertson.

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Capital One offers two 401(k) plan platforms for employers. The Spark 401k platform offers expenses of less than 1%, all exchange-traded funds (ETFs) and fiduciary services, while the Sharebuilder 401k solution is for larger plans and offers more dedicated services.

Recently, Capital One conducted a Spark 401k survey of 1,500 adults who are full-time employees ages 18 and older to gauge why employees are participating in their 401(k) plans and why some are not.

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Stuart Robertson, president of Capital One Advisors 401k Services, told PLANADVISER that access to retirement plans continues to be an issue in the small business market. He said most small businesses think they can’t afford to offer a plan or that they have to provide a matching contribution on employee deferrals.

According to Robertson, 86% of employees whose companies offer a plan are satisfied with it, and 79% are confident their contribution levels will support them in retirement.

So, why are some employees not participating in their employer’s retirement plan, and what would spur them to do so? The Spark 401k survey found 40% of employees feel they do not make enough money to contribute, and 14% say it costs too much to participate.

Given these findings, it is not surprising that having a higher salary was the top reason respondents would consider participating in their 401(k) plan (49%). In addition, 37% of employees say they would reconsider participating if employers matched their deferrals, and 22% would reconsider if there were lower fees.

Opportunity for Education

Robertson said he sees an opportunity for education in the research findings. Asked what they think they are paying for investments in their 401(k) plan, 62% of employees said they do not know. This is more pronounced among female respondents: 77% of female employees whose companies offer a 401(k) have no idea what their 401(k) fees are compared to 53% of men.

Robertson added that the survey found 29% of employees indicated they believe they pay 5% or more in fees, and 51% said they have no idea what a fair rate for fees would be.

According to Robertson, most don’t understand that saving 10% to 15% of salary is necessary for a secure lifestyle in retirement. And for those survey respondents who said they would reconsider participating if they had a higher salary, education can help. “They may not be in a position to start saving, but knowing that savings are tax-deferred and it is not a dollar-for-dollar hit to their paycheck would be helpful,” he said.

Robertson said a glaring finding for him was that 58% of men are participating their company’s 401(k) plan, but only 25% of women are. However, he caveated that 49% of women work at company that does not offer a plan versus 29% of men.

Retirement income

Finally, another surprising finding was how many respondents still plan to rely on Social Security for income in retirement.

The survey found 50% of Millennials, 82% of Baby Boomers and 51% of Gen X plan to rely on Social Security as one of the means to fund their retirement.

“Given the issues with Social Security solvency, reliance by generation is dropping back, but still, the majority of folks plan to rely on it,” Robertson said.

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