Paychex Review 2022 | Employee Retirement Plan Review

Paychex Editor's Score: 93/100








transparent pricing 87/100
low employee investment fees 90/100
Mobile and online access 100/100
No fees for sign-up and administration 90/100
variety of plans 100/100

Why Paychex is the Best All-in-One Solution

Paychex is a great all-in-one solution as the company provides HR, payroll and employee benefits in addition to retirement account administration and recordkeeping. The company offers a full menu of options, so you can choose which Paychex features you want.

professionals

  • Business owners can manage their HR, payroll and employee retirement benefits in one platform.
  • Paychex lets business owners tailor a retirement plan to the unique needs of their company.
  • It provides user-friendly online and mobile app-based tools.

Shortcoming

  • Retirement benefit management is not a core competency of Paychex.
  • Paychex representatives provide limited guidance on 401(k) plans and retirement planning.
  • Retirement planning services are only available to businesses that also use Paychex's payroll services.

plans

Unlike some of the top employee retirement providers, Paychex does not offer individual plans. Instead, employers can create a 401(k) plan that includes recordkeeping, administration or plan design — or any combination of those features — that includes only recordkeeper services and stand-alone third-party administration.

Paychex users can bundle health benefits, payroll and HR services as well as outsource services to a full-service Professional Employer Organization (PEO). Notably, however, businesses that do not use Paychex's payroll services are not eligible for the company's retirement services.

did you know?did you know? Offering retirement benefits to your employees like a 401(k) helps your small business, too.

additional features

  • Onboarding: In addition to helping employers choose investment options and optimize plan parameters, Paychex can work with your current HR and benefits provider to transition to a new platform and plan. This includes managing and completing required documents, setting up payroll, and re-enrolling participating employees.
  • Bundled Recordkeeping and Payroll Integration: Employers can use Paychex to handle all aspects of their retirement plan administration and record keeping. Paychex also offers recordkeeper-only services for employers who prefer more basic features.
  • Easy Enrollment: Employee enrollment can be completed through the mobile application or automatically. Employees can also use the app to check retirement contribution amounts, rebalance their accounts and review investment performance.
  • Employee Resources: In addition to chatting with a representative through their Paychex Flex accounts, employees can take advantage of Paychex's FAQ page. However, these online resources are more limited than those offered by dedicated retirement providers, and representatives may not provide investment-specific guidance.

account type

Paychex customers can choose from a variety of retirement plans, including traditional 401(k) plans, 403(b) plans, SIMPLE IRAs, and even employer plans (PEPs). Each of these plans has its own rules and regulations, as set out by the IRS.

  • PEP: A PEP is a new type of plan that allows employers to pool multiple retirement plans into a single 401(k).
  • Traditional 401(k): Companies can work out their plan with a financial advisor and decide on their match.
  • Owner-only 401(k): Owner-only plans allow entrepreneurs to maximize their tax-deferred savings.
  • Solo 401(k): A solo 401(k) is like an owner-only 401(k), but many also include a checkbook option that allows account holders to invest in alternative assets.
  • Simple IRA: A SIMPLE IRA is like a basic, easily managed 401(k) that can be a good cost-effective option for businesses with fewer than two dozen employees.
  • 403(b): A 403(b) is like a 401(k) for churches, charities and government agencies.

investment options

Employers who use Paychex to provide employee retirement benefits get access to thousands of investment options. However, these investments depend on the offerings of individual financial advisors and are, therefore, not described on the Paychex website.

And while the Paychex platform makes it easy for employees to choose their allocations to change investments—since most Paychex plans are designed by financial advisors—it's unclear whether Paychex will be able to incorporate investments such as individual securities or stocks in private companies. I am so flexible.

Pricing

Like many top employee retirement providers, Paychex does not publish its retirement benefit pricing on its website. Instead, pricing depends on the business's customized retirement plan and other Paychex services used by the business. If your business already uses Paychex to process payroll, contact your account representative to get a quote for retirement services. You can also get a quote by submitting a request through the website or using the online chat option. Alternatively, you can contact the Paychex sales team via telephone.

ease of use

Paychex's full sign-up and onboarding procedures are not detailed online, but employers can sign up by contacting the sales team by phone or website. The type of services an employer chooses from Paychex also determines the overall ease of use of the platform. Business owners who opt for comprehensive recordkeeping and administration will experience more streamlined onboarding and long-term plan administration.

customer service

Employers can contact Paychex about retirement services by phone Monday through Friday, 8 a.m. to 8 p.m. ET. Users can also email the support team, access their Paychex Flex account online, or live chat with a representative. Employees who need help with retirement services can view a selection of frequently asked questions online, or access their Paychex Flex account and chat live with a representative.

Despite these resources, some current Paychex users report a lack of coordination among support representatives in different service areas.

drawbacks

Paychecks have some drawbacks when it comes to retirement benefits. First, Paychex is primarily a payroll company, so retirement benefits are not a core competency of the company. If you don't have a dedicated representative to help with your retirement account, it can make issues difficult to resolve. Also, you must be a Paychex payroll customer to be eligible for the company's retirement services.

TipTip: Looking for a dedicated employee retirement benefits provider? Consider our review of the American 401k, our Human Interest review or our ShareBuilder 401k review.

What is an Employee Retirement Benefit Provider?

An employee retirement benefit provider is a company that helps small business owners establish and administer retirement plans for themselves and/or their employees. Companies offer a variety of plans, investment options, facilities and services depending on their role in the planning and administration process. Some providers also offer features such as payroll administration to make it cheaper and easier for participants to contribute to their accounts.

questions to ask

Is Paychex a Good Company?

Paychex is a very large and respected company. It's also a great provider of 401(k) plans, especially if you also need payroll and HR services or if you have a financial advisor you want to work on the design of the plan.

Is Paychex safe to use?

Paychex is absolutely safe to use. It is a very large, reputable, secure company. It has strong security policies and handles payroll for many large companies.

Which is better: ADP or Paychex?

ADP and Paychex are both very large companies that focus primarily on providing payroll services, but both also offer employee retirement benefits. Each company has its strengths and weaknesses, and which one is better depends largely on the needs of your small business. Read our ADP Retirement Planning review to learn more about its retirement service.

ground level

We recommend Paychex for…

  • Businesses that already use Paychex to manage their HR and payroll needs.
  • Small and medium-sized businesses that want to outsource HR, payroll and employee retirement benefits.
  • Businesses that want to offer collective employer plans.

we No Recommend Paychex for…

  • Businesses that don't already use Paychex's payroll and HR services.
  • Business owners who want an account manager with expertise in retirement planning and investing.
  • Large organizations that require strong employee retirement options.

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