With Honest Dollar and ForUsAll your pension plan cost savings compound
Honest Dollar is the latest US startup planning to disrupt the pensions market by selling individual retirement account benefits to small companies for a low, fixed monthly fee. Like ForUsAll, it builds its portfolios around low-cost institutional index funds. The Government Accountability Office estimates that firms with less than 50 workers pay administrative fees that are on average twice those of participants in larger plans, and both Honest Dollar and ForUsAll charge less than half of a traditional small group IRA plan.
Will Hurley, a serial entrepreneur in Austin, Tex., wants to upend Wall Street. He’s starting with a decidedly unsexy part of the financial landscape: small-business retirement planning.

Honest Dollar, Mr. Hurley’s new venture, plans to begin selling individual retirement account benefits to companies this month for a fixed monthly fee of $8 per employee. Intended for even the tiniest businesses with only a handful of employees, which rarely offer retirement benefits for their workers, the site aims to bring simplicity and transparency to a market that is often a minefield of hidden fees.

An unlikely convert to the financial industry, Mr. Hurley, a longtime software developer, talks with a missionary zeal about lowering the carrying costs of retirement accounts. “When people are paying 2 percent in fees — that’s criminal,” he said. “Between you and your retirement, there’s lots of exit routes for your money.”

Small companies greatly trail bigger ones when it comes to retirement benefits. When companies are young, entrepreneurs have more pressing priorities — like making enough money to stay in business — and as they grow, new obstacles emerge, like cost and complexity. Only 14 percent of businesses with 100 or fewer employees sponsor a retirement plan, according to an estimate by the Government Accountability Office, and employees at the smallest companies, those with 50 workers or fewer, pay administrative fees that are twice as high on average as those paid by participants in larger plans.