Corporate 401(k) <$10MM

FirstFuel Software, Inc.




FirstFuel Software, Inc., has put considerable focus on keeping 401(k) expenses low, since the plan’s inception.

“When we started, there were zero assets, but we were still able to offer a plan with very low expenses and excellent investment options for our participants,” says Holly Abernethy, human resources (HR) director at the company, in Lexington, Massachusetts. “Even as a startup, our average investment expense was roughly 30 basis points [bps].” 

FirstFuel, founded in 2010, focuses on customer engagement for energy providers and their business customers, and has a cloud-based customer-engagement platform. The employer, working with its recordkeeper, Empower Retirement, has three main goals for its $2.7 million plan. These are: provide participants with an understanding of what saving for retirement entails, have excellent investment options for participants to build their portfolios, and maintain an eye toward expenses.
“We make sure to benchmark our plan versus others of our size,” Abernethy says. FirstFuel reviews third-party industry benchmarking data “to see where we stand,” she says. “We are vastly better off than the average plan of our size, in terms of expense.”
The 401(k) plan has a 96% participation rate and an average deferral rate of 12%. Still, FirstFuel sometimes faces challenges in encouraging its work force to save enough. “We have very much a white-collar staff, but a young one,” Abernethy says. “The main issue is making them aware of the need to save.”
So, with the help of its adviser, Chrisopher Connolly of Capital Analysts of New England Inc., the plan utilizes Trust Builders Inc.’s TRAK (The Retirement Analysis Kit) retirement-planning software “to make retirement more tangible for our younger workers,” Abernethy says. “It projects their savings and savings rate versus future income needs. It’s done using their own pay [data] and therefore customized. It seems to really hit home.”
The sponsor employs Empower’s retirement readiness tools as well to monitor retirement readiness overall. And the company encourages employees to take advantage of the on-site meetings it offers, where they can consult the plan’s adviser. “Our participants meet routinely with the adviser,” Abernethy says. The advisory team “comes out to the office numerous times per year, and most participants take advantage of a meeting at least once per year.”
Looking ahead, the sponsor is analyzing various educational and communication tools for group meetings, Abernethy says. Also, the employer is considering enhancing the plan design features. “Our marketplace for talent is rather competitive, and we have been able to utilize our plan as a draw for that talent,” she says. In the future, “we’ll be contemplating a matching program, along with the possibility of profit-sharing contributions.” —Judy Ward

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