News Tech: Retail banks are collaborating with record keepers to provide 401(k) programmes for the SMBs they support.
For small businesses seeking “the building blocks to get their plans up and running,” Huntington National Bank, for instance, launched a 401(k) plan last month, according to Frank Zugaro, executive vice president of Huntington Private Bank’s retirement plan services division in Akron, Ohio. The wealth division of Huntington National Bank is called Huntington Private Bank.
The debut comes after the October 2020 rollout of Everyday 401(k), a 401(k) plan for J.P. Morgan Chase & Co.’s small-business clients.
Further spurring banks to offer 401(k) plans is an expectation that tax incentives will become even juicier.
In addition to wanting to take advantage of tax incentives, many of Huntington’s more than 400,000 small-business clients are also driven by a desire to gain a recruiting edge. “Retaining and attracting employees is a high priority, especially in the current labor market,” Mr. Zugaro said of small-business clients looking to launch retirement plans. “It’s always better to have a plan than not when recruiting employees.”
The bank’s new offering is designed for companies with 25 to 50 employees and is well suited for employers that don’t currently offer plans as well as those with small plans with $1.5 million to $2 million in assets, Mr. Zugaro said. The plan’s investment menu consists of 17 core investment funds plus a target-date fund series. The investments, which are “asset manager agnostic,” use the lowest cost share-class possible, Mr. Zugaro said, explaining that they do not have 12b-1 fees or revenue sharing.
Huntington Private Bank serves as the plan’s 3(38) investment manager. Since its launch on Aug. 3, the Huntington 401(k) plan has drawn one employer. Mr. Zugaro declined to name the company.