As a small business owner or manager, you are responsible for compliance with Federal law in establishing and maintaining a 401(k) Plan for your employees. Selecting a competent professional consultant or service provider to establish and monitor your 401(k) Plan makes the most sense.  Selecting the appropriate consultant can be one of the most important decisions you will make in establishing a 401(k) Plan. 

As a small business owner or manager, you need to first consider what specific services you will require for your plan.  Will you require legal advice?  Will you require long term accounting, recordkeeping, investment management, or a trustee?  Don’t select the first consultant you talk to.  Talk to a minimum of three consultants prior to making a decision.  Ask potential consultants / service providers about the services they provide. 

Present each prospective professional consultant / service provider with identical outline relating to the needs of your 401(k) Plan.  Request a written proposal from each potential consultant along with detailed fees and expenses they require to establish, and or maintain the 401(k) plan.  Also ask potential consultants to be specific about what, if any services they do not provide.  You do not want to be surprised with unexpected fees or lack of services once you have retained a consultant.  Also ask for customer references or other information relating to the quality of their services or customer satifaction with their services - as well as any possible alliances the potential consultant may have with other services or service providers.  (These arrangements are often called “bundled services”). 

Once you have chosen a professional consultant or service provider for your 401(k) Plan, it is a good practice to periodically review the performance of your consultant or service provider to ensure they are providing the services at the cost per your service agreement.