Vanguard is the largest mutual fund company in the world, which is why it’s one of the most well-known and respected investment companies. While Vanguard offers a wide range of investment options for personal investors, the company also offers a 401(k) investment plan designed specifically for small businesses, called the Vanguard Retirement Plan Access. This plan allows plan participants to choose from traditional mutual funds and exchange-traded funds (ETFs) within a 401(k) plan.

Who it’s best for

The Vanguard Retirement Plan Access is great for small businesses that don’t have in-depth knowledge about how to run and administer a 401(k) plan for their employees. Vanguard is an attractive offering for employees as well, because the company offers a wide range of funds, both international and domestic, and has generally good returns and lower costs than other providers. It’s important to note that Vanguard is focused solely on being a money manager, which gives small businesses the benefit of having a specialist focus on their 401(k) plan.

Check out our roundup of the Best 401(k) Companies for Small Business

Investment options

Vanguard provides a wide variety of investment options, including mutual funds, ETFs and what are known as Target Date Funds. The target funds were created to maximize retirement earnings and are a cost-effective investment option. Vanguard’s bread and butter are its mutual funds, and the company has a diverse list of more than 100 of them. Both of these options are available in just about every 401(k) plan. Small businesses can also choose to add a brokerage function to their plan, which would add the availability for less risk-averse plan participants to choose ETFs as part of their portfolio.

Setup/plan administration

Vanguard also fairly seamless integrates with digital funds transfers that can be completed with either direct bank transfers or through payroll. Once the plan is set up, Vanguard provides support to the small business, including ongoing compliance testing to ensure the plan retains its tax-advantaged status. Once the plan is set up, however, a plan administrator will be the one communicating with Vanguard, not the employer.

Administrative costs

One of the nice features about Vanguard’s small business 401(k) plan is that it reduces the cost for the employer. Since small business plans don’t often require the same time and attention as larger plans do, Vanguard reduces its fees for these plans to attract more customers. In its small business plan, Vanguard charges a fee on a per-participant basis, instead of scaling fees according to the plan’s assets. There is no plan setup fee, either.

Employer and employee customer service

The Vanguard 401(k) plan doesn’t normally offer customer service directly to an employer, as most of these plans are handled through an intermediary such as a plan administrator. The plan administrator is who will communicate directly with Vanguard, and the employer and its employees will communicate with the administrator as well. This makes the customer service aspect rather clunky, and could result in a lack of communication or misinformation being disseminated about the plan and/or the investments.

What’s lacking

One of the biggest negatives to the Vanguard plan is the lack of customer service. Forcing employers and employees to deal with an intermediary means that there is a hiccup in the customer service process. Employees can’t get questions about their investments answered directly, and have to contact the plan administrator instead. Then they must wait for a response.

How to get started

You will need to contact Vanguard directly and set up a 401(k) investment portfolio that includes Vanguard funds. The Vanguard Retirement Access plan is a product designed specifically for small businesses, but it is not a formal 401(k) plan that a small business signs up for directly. This makes the process a little more difficult and complicated than it has to be, but designing a 401(k) plan with Vanguard’s attractive funds is still very possible.


  • Great for small businesses that aren’t as familiar with 401(k) plans
  • Attractive options for mutual funds, target date funds and even ETFs
  • Low costs compared with other providers
  • High-performing funds, especially mutual funds
  • Well-respected company in the investment marketplace
  • Very transparent with fees
  • Offers an option for both traditional and Roth contributions


  • No direct customer service for the employer and the employees
  • Not a simple sign-up process, since a plan administrator will have to cobble together funds to create a plan
  • Technology that runs the platform could use an update

Rating breakdown

  • Overall: 4.1
  • Investment Options: 4.9
  • Administrative Costs: 4.7
  • Ease of Set-Up: 3.6
  • Employer and Employee Customer Service: 3.5
  • Reputation: 3.8