The fund providers new plan offering suggests that larger financial service providers are paying more attention to the growing number of small businesses as a way to expand their 401(k) market share. A growing number of mutual fund providers like
The main selling point for T. Rowe Prices new plan is the recent tax law change increasing annual 401(k) contributions to $42,000 next year from the current $41,000 limit. T. Rowe Price also points out that 401(k) plans also offer a catch-up provision for individuals who contributed less than the plan limits in previous years.
"When we looked at our existing small-business plan customers, we found that approximately one-third could benefit from the higher contribution limits associated with an individual 401(k) Plan," said Douglas Harrison, vice president and head of the tax-deferred products development and management group at T. Rowe.
The firms new plan includes at least 65 no-load mutual funds and is available without a start-up fee. Annual $10 per fund administrative charges are waived in accounts with more than $5,000 per fund or $50,000 per shareholder.