As we recently announced changes to our tiers and pricing, we understand that you may have questions. This guide shares answers about why this is happening and what this may mean for you and your employees.
I noticed you changed your tiers. Does this affect my plan?
On October 2, 2023, we announced updates to our packages and pricing tiers for new plans only.
As an existing plan, you will not see updates to your pricing as of this date. However, your pricing will be transitioned to the new base fee pricing in the future. Your current active participant fees and your participants' AUM fees will not change as a result. Please continue reviewing this FAQ for additional details.
See our Form ADV 2A Brochure for more information about our fees.
When will pricing change for existing plans?
We want this transition to be as smooth as possible for all our customers. That’s why we’re committed to giving ample notice before these updates go into effect.
All plans will receive email notifications at least 3 months in advance of their pricing changes. These notifications will be sent from December 2023 through September 2024, depending on when your plan first became active with us.
For example, if your plan became active before May 1, 2023, you can expect to receive your notice by the end of January 2023 or sooner; plans active after May 1, 2023, can expect their notices by the end of September 2024. Please also note, plans that are active by the end of 2023 will have had a minimum of 12 months with legacy pricing before the changes are effective.
Pricing changes will then occur on or after April 1, 2024. The exact date for your plan will be indicated on the email notification you receive.
Why is Guideline changing the pricing tiers?
As we continue to improve Guideline’s package offerings, we’ve had to make adjustments to our tiers and pricing structures. These changes come along with the launch of our Starter tier, a simplified 401(k) solution for businesses new to retirement benefits, as well as enhanced features for Core and Enterprise tiers.
You can learn more about these changes and features within our announcement here.
Although our tiers are changing, we’re still committed to our philosophy of straightforward, transparent pricing. Guideline continues to offer plans with low monthly costs and no transaction fees. This means employers don’t pay extra for plan setup, plan transfers, or 5500 prep*, and employees can avoid distribution, loan, and rollover fees.** See our Form ADV 2A Brochure for more information about our fees.
What are the new pricing tiers?
[New] - Starter: $39/month + $4/month per active participant
Core: $89/month + $8/month per active participant
Enterprise: $149/month + an active participant fee based on exclusive pricing options
Learn more about our pricing packages and see a comparison here.
Please note, according to IRS guidelines, existing 401(k) plans are not eligible to move to a Starter 401(k), as this is only available for businesses that have not offered a plan within the past 12 months.
How will employer pricing be impacted?
Existing Core or Flex plans: These pricing tiers will merge into the new Core mid-tier. Your monthly base fee will transition to the new Core pricing of $89 per month. Your monthly active participant fee will remain the same.
Existing Enterprise plans: Your monthly base fee will be adjusted to the new Enterprise pricing of $149 per month. Your monthly active participant fee will remain the same.
Learn about the enhanced features you’ll have access to with our new Core and Enterprise tiers here.
Will my employees’ pricing also change?
We’re happy to share that all Guideline participants within existing 401(k) plans will continue to benefit from our legacy AUM fees at this time. This includes any new hires or existing employees who become eligible to participate in your plan after the pricing package transitions.
However, if you decide to switch tiers, new employee annual account fees will apply based on your tier selection, ranging between 0.15% to 0.35%. See our Form ADV 2A Brochure for more information about our fees.
How does Guideline’s new pricing compare to what’s available in the market?
Guideline remains one of the most affordable 401(k) providers on the market for both sponsors and participants.
This year, we’ve also doubled-down on strengthening our saver experience — making Guideline 401(k) plans more accessible than ever via a mobile app and more affordable by updating our fund menu with lower expense ratios.
See our Form ADV 2A Brochure for more information about our fees.
Can I move to Starter if I already have a plan with Guideline?
Starter 401(k) has been created by IRS legislation to support businesses offering a retirement benefit for the first time. Employers are only eligible for a Starter 401(k) plan if they don't yet provide their workers with a retirement benefit, with a few exceptions:
Businesses that previously had an IRA through a mandated state-sponsored retirement program can choose to establish a Starter 401(k).
Companies that have not offered a 401(k) plan in at least 12 months may be eligible for a Starter plan.
Learn more about the features and requirements of a Starter 401(k) and how they differ from standard 401(k) plans.
Do I need to take any action?
You do not need to take action. The pricing transition will happen automatically on the date reflected within the email notification you receive. You will then see the new pricing in your monthly invoices from that point moving forward.
However, if you would like to change your tier prior to your plan’s pricing change effective date, you can switch to one of the newly available pricing options if your plan is eligible. Please note, existing plans are not eligible to move to a Starter tier, as this is only available for businesses that have not offered a 401(k) plan within the past 12 months.
Can I move to a different pricing tier before the transition?
If you are eligible to switch plans,*** you are welcome to transfer to our new Core or Enterprise tiers any time before or after your transition to the new pricing. However, legacy pricing will no longer be available.
For eligibility, please note the following:
Existing plans cannot move to a Starter tier. Per IRS guidance, Starter 401(k) plans are only available for businesses that have not offered a retirement plan within the past 12 months.
Plans that transferred from a previous provider are required to remain in the Enterprise tier for 12 months before becoming eligible to switch to the Core tier.
What are my options if I do not want to take part in the pricing update?
Once your pricing transition date as outlined in your email notification has passed, the existing pricing will no longer be available. If you’d prefer to discontinue your plan with us as a result, we can discuss alternative options, such as helping you transition to another provider or terminating your plan.
Alternatively, if you are interested in switching to a different pricing tier, you can do so any time as long as you are eligible3 but new pricing will apply.
Please note that Starter is only available for businesses that have not had a 401(k) plan within the past 12 months.
Where can I learn more about the package and pricing changes?
If you’d like to find additional information about these updates, please check out our announcement or see a comparison of all our packages here.
* Fees may be owed for the preparation of an independent Form 5500 audit. This fee is charged by the independent auditor and not Guideline.
** Guideline does not charge additional fees to close the plan, but the plan sponsor is responsible for paying the monthly fees until the plan has been terminated in accordance with applicable law, or until the plan has been transferred in full to another service provider.
*** Companies that transferred an existing retirement plan to Guideline must remain in an Enterprise tier for at least 12 full calendar months before becoming eligible to switch pricing plans.