Paychex Employee Retirement Review

Why Paychex Is the Best All-in-One Solution

Paychex’s reputation as one of the best employee retirement plan providers is well-deserved. The brand offers a great all-in-one solution that includes HR, payroll and employee benefits, in addition to retirement account administration and recordkeeping. Like prominent competitor ADP, the company provides a full menu of options so you can choose which Paychex features you’d like.

Plans

Paychex offers a variety of plans ( including traditional 401(k) plans, solo 401(k) plans and SIMPLE IRAs) —  especially compared to employee retirement providers. For example, Guideline only offers safe harbor 401(k) plans while Perfect401(k) only offers traditional 401(k) plans. This makes Paychex the ideal solution for businesses seeking a variety of retirement plans/options.

With Paychex, employers can build a 401(k) plan that includes recordkeeping, administration or plan design – or any combination of those features – including recordkeeper-only services and stand-alone third-party administration.

Paychex users can also bundle health benefits, payroll and HR services, as well as outsource services to a full-service professional employer organization (PEO). A company representative told us that 91% to 92% of the company’s employee retirement customers also use Paychex for payroll. In fact, Paychex is also one of our picks for best payroll services. That being said, we find this to be an attractive solution for employers who already use Paychex for their HR and payroll needs, as the integrations are simple and convenient.

Additional Features

• Onboarding: In addition to helping employers choose investment options and customize plan parameters, Paychex can work with your current HR and benefits provider to transition to the new platform and plan. This involves managing and completing the necessary 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’s administration and recordkeeping. Paychex also offers recordkeeper-only services for employers that prefer more basic features.
• Easy enrollment: Employee enrollment can be completed via mobile apps or automatically. Employees can also use the app to check retirement contribution amounts, rebalance their accounts, and review investment performance.
• Employee resources: Employees can find answers to their questions by chatting with a representative through their Paychex Flex accounts, or taking advantage of Paychex’s FAQs page. However, these online resources are more limited than those offered by dedicated retirement providers, and representatives cannot provide investment-specific guidance. That said, Paychex does offer a retirement calculator on par with that of the brand’s competitors.
• Easy contribution setting: Employees can use Paychex to set up automatic periodic increases in the percentage of their wages invested per paycheck. They can also use the included income projection tool to adjust their wages invested per paycheck to meet their retirement goals.
• Mobile access: Paychex is designed for seamless mobile access. This gives it a leg up on ShareBuilder 401k, which lacks a mobile app. A Paychex representative told us that “mobile first” is the brand’s key design principle. Nevertheless, ShareBuilder 401k is our top pick for low fees; read our ShareBuilder 401k review to learn more.

Account Types

Paychex customers can choose from several types of retirement plans, including traditional 401(k) plans, solo 401(k) plans and SIMPLE IRAs. Each of these plans has its own rules and regulations, as determined by the IRS.

• Pooled Employer 401(k) Plan: Employers can pool assets into one large plan and maximize their tax-deferred savings.

• Traditional 401(k): Companies can design their own 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. Not every employee retirement vendor offers these plans, but Paychex does. This gives Paychex an advantage over some of our other top picks, like Human Interest.
• SIMPLE IRA: A SIMPLE IRA is like a basic, easy-to-manage 401(k) and can be a cost-effective alternative for businesses with fewer than 100 employees.
• Multiple Employer Plan: Employers can pool their resources in a single retirement plan with similar employers.

Investment Options

Employers that 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. This makes Paychex less transparent about investment options than ShareBuilder 401k and Human Interest, both of which publicly list all their available options.

The Paychex platform makes it easy for employees to select their allocations in equity and bonds. It’s also easy to adjust your contributions per paycheck based on your retirement goals. However, because most Paychex plans are designed by financial advisors, it’s unclear how flexible Paychex is in including investments such as individual securities or stock in private companies.

Pricing

Paychex does not publish its retirement benefit pricing on its website, which is another mark against Paychex on the transparency front. Other vendors we reviewed, including American 401k, publicly and clearly list their prices.

Instead, Paychex pricing depends on a business’s customized retirement plan and the other Paychex services the business uses. You’ll pay a monthly administration fee alongside a per-employee cost. There will also be a one-time setup fee. All these fees are standard with employee retirement vendors.

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 by using the online chat option. Alternatively, you can contact the Paychex sales team via phone.

Ease of Use

A dedicated group of Paychex employees will assist you with onboarding after a sales rep guides you through signup. We found nothing especially complicated about this process in our research, as is the case with most employee retirement platforms’ setup.

The services an employer chooses from Paychex also determine the platform’s overall ease of use. Business owners who opt for comprehensive recordkeeping and administration will experience more streamlined onboarding and long-term plan administration. No matter what, Paychex empowers employees to near-automatically adjust their investments to earn them enough money for retirement.

Paychex Customer Service

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

In spite of these resources, some current Paychex users report a lack of coordination between support representatives in different service areas. Similarly, Paychex is one of few employee retirement vendors we reviewed that doesn’t highlight its phone number toward the top of its website. You can scroll to the bottom to find this number, but even there, customer service hours aren’t listed; we obtained them through a company representative.

Paychex Drawbacks

Paychex isn’t transparent about its pricing, whereas many of our top picks explicitly state their pricing on their websites. This is partially due to Paychex’s highly customizable nature and the extent and number of services the brand offers. But for employers who need price information from the get-go, Paychex may be an imperfect fit.

We also weren’t impressed with the user interface when we tested Paychex’s dashboard. Though the interface is navigable, it feels outdated compared to the crisp, clean dashboards of competitors such as Human Interest and ShareBuilder 401k. We expected more on this front from a legacy brand like Paychex.

Paychex also diverges from Human Interest and ShareBuilder 401k in that the company doesn’t publicly state its investment options. To give the brand credit where it’s due, the employee dashboard does make it easy to change your balance of equity and bonds. But Paychex lacks a table of investments on par with the robust information that Human Interest and ShareBuilder 401k provide.

Methodology

To figure out our best pick for all-in-one employee retirement vendor, we researched plan providers known for offering a variety of services. Many small business owners lack the time to oversee separate retirement, payroll, HR and employee benefits services. That’s why all-in-one solutions can be so make-or-break for business owners.

We looked at employee retirement plan vendors that specialize in these particular services. We sought statistics on how many of these companies’ retirement plan customers also used them for other services. To rank as our top all-in-one pick, the vendor needed to couple this high all-in-one usage rate with clear information about its additional services. Paychex hit all these marks.

Overall Value

We recommend Paychex for …

• Businesses that already use Paychex to manage their HR and payroll needs.
• Small and midsize businesses that want to outsource HR, payroll and employee retirement benefits through an all-in-one solution.
• Businesses looking for a variety of retirement plans ranging from SIMPLE IRAs to traditional 401(k)s.

We don’t recommend Paychex for …

• Businesses that need immediately transparent employee retirement plan pricing.
• Business owners looking to give their team a modern, easily navigable employee dashboard.
• Businesses seeking transparency into the funds in which their employees can invest.

Dock Treece also contributed to this article.