The history of the 401k has been chronicled over and over the past three or four decades. They started becoming more and more popular when the traditional pension plan became increasingly more expensive as the World War 2 generation began to reach retirement age in the 1970s.  Now, pensions are almost extinct and other retirement plans (including 401ks) have been trying to fill that void.

401ks, up until recently, have been very expensive to start because of compliance with the rules and regulations.  Many service providers are often needed to make sure these plans stay compliant. However, technology has driven the cost of many 401k service providers down, along with many other things in society.  Many service providers can accomodate different services which allows companies that have/start 401ks to eliminate the need for multiple service providers (and the fees associated with them).

Also, new government regulations require plan service providers to disclose their fees (we cannot wait until they create regulations/transparency like this for PBMs), which was an issue before these went into effect. This has helped drive the cost of the actual investments used in the 401k down along with the fees for the service providers.

Economies of scale are much better now for small companies looking to offer a 401k program. Other reasons you should consider offering a pharmacy 401k include:

1. Fees - see above paragraphs

2. Demographics - right now is a great time to offer a plan for most pharmacies if the plan design is set up to take advantage of the demographics of the pharmacy.  Most plans are set up to provide the employees the same benefit that you the owner gets. You may be able to tilt the benefit of the plan to you.

3. Benefit Program - as health care insurance gets more and more expensive, this can be a great cost effective substitute or complimentary to your current health plan.  It can help you attract, retain and reward your key employees.