JPMorgan Everyday 401(k) Platform Signifies Micro-Market Competition

JPMorgan Chase has announced the launch of the Everyday 401(k) by J.P. Morgan, through which small-business owners and startup organizations can set up a 401(k) plan by selecting J.P. Morgan Asset Management’s (JPAM) ready-to-use solutions, or by customizing their own plan.

SS&C Technologies will act as the underlying recordkeeper for the Everyday 401(k), with plans starting as low as $75 per month, with a $5 per participant monthly charge.

Jamie Dimon, chairman and CEO of JPMorgan Chase, says the Everyday 401(k) will leverage capabilities from across JPAM and Chase.

“We are uniquely positioned to support small businesses with solutions such as Everyday 401(k),” Domon suggests. He cites JPAM research indicating that a large majority (85%) of small-business owners are confident their business will survive the current economic environment. The JPAM data also shows more than one-third of small business owners plan to offer a 401(k) in the next year, while less than half (48%) currently offer a 401(k) plan. Low revenue is cited as the top reason small businesses do not offer a 401(k) plan, while nearly a quarter believe administration is too costly.

One notable feature is that the Everyday 401(k) allows small business owners to commence setting up a plan and enroll their employees online at the main Chase.com banking homepage. After answering a few questions to narrow down their plan options, determine pricing and select the plan for their business, owners can choose a customized plan and enroll their employees. From there, business owners confirm details with an SS&C retirement representative to give employees access to Chase resources and advice.

Asked to explain how this development stacks up against the firm’s existing Retirement Link business line, Michael Miller, JPAM’s head of retirement for the Americas, tells PLANADVISER that the two solutions should viewed as complementary.

“We built this solution specifically to help small business owners and their employees plan, save and invest for their future,” Miller says. “This 401(k) solution provides a low cost, digital solution for micro-market and start-up 401(k) plans. The J.P. Morgan Retirement Link solution continues to play an important role in delivering retirement plan solutions to clients in the small- to mid-market retirement plan space. Both these solutions leverage our industry leading content and investment capabilities and are focusing on helping Americans build stronger retirement savings.”

Miller says the firm is excited to leverage the breadth of resources available on Chase.com and to help plan participants with their spending and savings goals. 

“Through Chase.com, we are able to reach tens of thousands of Chase for Business customers, as well as nearly half of U.S. households that Chase serves, with a broad range of financial services, including personal banking, credit cards, mortgages, auto financing, investment advice, small business loans and payment processing,” he adds. “Our goal for Everyday 401(k) will be to fully integrate into Chase customer’s existing online experience.”

As to the choice to go with SS&C Technology as the underlying recordkeeper, Miller says this was a pretty easy one, in the end.

“SS&C, in addition to having robust scale and a proven technology base, provided a lot of the capabilities we were looking to deliver to small business employers, with a focus on delivering a digital forward, simple and low-cost retirement solution,” Miller explains.

This news from JPAM and Chase underscores the retirement plan industry’s growing focus on the small-plan and micro-plan market. As reflected in Miller’s comments, providers are coming to view this end of the market both as an opportunity to grow the number of plans and participants they serve, but also to open up new distribution pathways for other services in the areas of asset management, banking, insurance, etc.

Principal, for example, has recently rolled out Simply Retirement by Principal, a retirement platform designed to make 401(k) plans more accessible to businesses with fewer than 100 employees. Like the Everyday 401(k), the Simply Retirement platform emphasizes an affordable and seamless setup process.

PAi, a provider of 401(k) plan administration and recordkeeping services, is another firm active in this area, as it has recently joined forces with LPL Financial to deliver a small-plan market solution that combines 3(38) fiduciary services with robust and affordable recordkeeping and administration support.