Ascensus 401k Review: Is It Your Best Option?

Ascensus 401k Review: Is It Your Best Option?

Ascensus, LLC. is an American retirement and college savings services provider, the largest independent one in the country. The company also works as a brokerage (acting as the intermediary between buyers and sellers of financial securities). Ascensus has several IRAs, HSAs, and 529 plans, as well as, the well-known Ascensus 401k plan.

Founded in 1975, the company is currently headquartered in Dresher, Pennsylvania and has over $163 billion in assets under management. Ascensus currently has over 2,400 employees and generated a revenue of $302.5 million, in 2016. In 2017, Ascensus was ranked at number 4,147 in the Inc. 5000, having achieved 65% growth.

Ascensus Leadership Team

Bob Guillocheau – Chairman & Chief Executive Officer

Jim Gearin – Chief Operating Officer

James Lucania – Chief Financial Officer

Carl Negin – Chief Marketing Officer

John Schroed – Chief Information Officer

Ascensus 401k Plan Overview

Here are the highlights of the Ascensus 401k Plan.

Tax Benefits

All the employer contributions in the 401k plan are tax-deductible, and employers are not taxed on earnings. This attracts talented candidates and tends to boost employee morale.

If you opt for an integrated HSA account as well, all the money invested in that account is done with pre-tax contributions.

Third-Party Administration Services

The company provides TPA services that help with plan design, administration, and consulting services to optimize your plan.

Ascensus also does compliance testing, making sure your plan is up to standards. It has partnered with Kravitz, an expert in Cash Balance plans. They help you control costs while making the most out of tax benefits and maximizing contribution.

Range of Features

The plan is designed for all types of companies including small business units. The company has a number of tools you can use to create and refine your savings plan and retirement strategy. The Retirement Outlook Tool helps compare the current reality of your savings with future expectations, letting you work on your retirement savings goals.

The automatic increase and enrollment features make it easier for participants to start contributing. According to Ascensus, these automated features increase participation and contribution rates.

Portfolio Analysis

The majority of the investment options from the company are in mutual funds. There are several low-cost (and high-return) mutual funds from other companies, as well.

Ascensus offers several institutional shares, R-shares, and A-shares for you to invest in. You can also opt for pre-built portfolios, baskets, and investments designed according to specific risk levels, as well as, financial standings.

Customer Service

Ascensus, as a plan administrator, connects participants and employers with investment providers and financial advisors that help clients make better decisions. The company also provides continued support for both employers and employees.

You can contact Ascensus representatives on the website if you have any queries. If you want help with a new plan, you can call 800-345-6363. If you have any general inquiries or want specific help regarding financial services, you can call 800-346-3860, and go through the right channels.

Fees, Costs & Expenses

The typical participant fee is $25 and the asset fee can range between 0.45% and 1.5%. You can calculate the costs according to your plan with Ascensus’ pricing calculator.

The brokerage fees, costs, commission rates, and fund expenses of the various investment options are not disclosed on the website. You will have to contact a company rep to get pricing details on those services.

Ascensus 401k Review

Ascensus has a proven 401k plan, but there are still positives and negatives to it. Here are the most noteworthy pros and cons of Ascensus’ 401k plan.

Ascensus 401k Pros

The following are some points that set Ascensus apart as a brokerage company:

  • Ascensus has a BrightScope Rating of 74, which is only slightly below the average in its peer group.
  • The company comes in the top 15% for Total Plan Cost.
  • It is one of the largest providers of recordkeeping and TPA services.
  • The pricing is very lenient compared to other providers.
  • The company customer service system is extensive. It has separate lines for all its services and has collaborated with several third-party financial advisors.

Ascensus focuses on three major services: retirement savings, college savings, and HSAs. If you combine all three services, you can create effective and flexible benefits plans for your employees.

Ascensus 401k Cons

The following are some reasons why Ascensus may not be a suitable first choice for a brokerage company:

  • The company doesn’t have its fees listed on its website. While it provides a pricing calculator, it only gives an estimate, which is often the lowest it can get, in terms of costs.
  • The investment options are relatively limited and the company doesn’t provide information for them on their website.
  • The Ascensus website is hard to navigate and isn’t user-friendly.
  • You can’t find much information on the company. You will have to call them or set up a meeting to learn more about their services.

Ascensus prides itself on being the largest provider of recordkeeping and TPA services. However, it doesn’t do a good job of providing thorough or complete information on its services.

What is Ascensus Best Known for?

With over 97,000 retirement plans, more than 4.6 million 529 accounts, and over 574,000 HSA integrated plans, Ascensus is best known for providing a wide range of services in one place.

Ascensus is best for:

  • Beginner Investors
  • Integrated Services
  • IRA Accounts
  • TPA & Recordkeeping Services

Ascensus doesn’t has a very diverse set of investment offerings, but it does have a diverse product/service offering which is especially beneficial to the employer.

Other Brokerage Firm Alternatives

You can compare Ascensus with the following competitors to get a better idea of the quality of their service.

  1. VALIC: The Variable Annuity Life Insurance Company is an insurance giant specializing in tax-qualified retirement plans, after-tax investments, and supplemental tax-deferred. It is a subsidiary of the American International Group, Inc. (AIG), and is currently headquartered in Houston, Texas. Today, the company has over $86 billion in assets under management, and manages over 24,000 groups and 2 million plan participants across the US.
  2. Putnam Investments: Founded in 1937 by George Putnam, the company operates as an investment management firm. It specializes in 401ks, retirement plans, and mutual funds. It is a subsidiary of Great-West Lifeco, and is currently headquartered in Boston, Massachusetts. Putnam has over $183 billion in assets under management and generated an estimated revenue of $350 million in 2018.
  3. Barney & Barney: The company specializes in retirement services including 401ks, IRAs, and administration services. It was founded in 1909 and is currently headquartered in San Diego, California. The company was acquired by Marsh & McLennan in 2014 and has since been providing risk management and employee benefits services. Barney and Barney’s CEO has a 70% approval rate and the company generates an annual revenue of $103.8 million.

Compared to its competitors, Ascensus is the only company to provide both retirement and college savings services, essentially helping increase employee retention in companies with younger employees.

Ascensus 401k vs Student Loan Benefits

When it comes to employer-sponsored benefits, the preferences of employees are changing. For example, in a survey of 1,000 millennial employees, about 49% said they’d rather have their employers pay off their student loan debt, than offer them 401k.

To cater to this need, Ascensus offers up to $5,250 in “educational contributions” as one of their employee benefits.

To make things easier for such employers, and battle the student loan debt crisis, the US government has introduced the following acts:

Retirement Parity for Student Loans Act

With the help of the “Retirement Parity for Student Loans Act,” employers would be able to make matching contributions towards their employees’ student loan payments, using their retirement plans. However, this applies to payments for qualified student loans only (i.e. loan taken to pay for certain higher education expenses). Under this act, these contributions are to be considered the same as contributions made towards a standard retirement plan.

Employer Participation in Repayment Act

Companies that contribute towards student loan repayments can benefit from the “Employer Participation in Repayment Act.” Introduced in February 2019 by US Senator John Thune, this act allows employers to contribute up to $5,250 towards towards repaying student loans of their employees – tax-free.

FutureFuel.io is one of the companies helping employers contribute towards student loan repayments. The company offers student loan assistance as a benefit to employers like Salesforce and Transamerica. As a software platform, it enables employees to manage all their student debt in one dashboard. Employees will also get real-time notifications of employer contributions.

Is the Ascensus 401k Plan Right for You?

Ascensus is more of an all-encompassing retirement and savings service provider, and less of a 401k specialist. It’s geared more towards employers than employees.

Employees have limited investment options and the website dashboard isn’t very user-friendly. However, for employers, it’s a pretty good option due to integrated services with decent fees. All in all, it’s best to compare Ascensus’ plan with plans from other providers before making a final decision.