Penelope, the fintech platform that seeks to stop the “Great Resignation” in small businesses
Small businesses already have a tool that allows them to attract and retain their employees, one of their top priorities.
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Penelope is a 401(k) platform that, in addition to being affordable and easy to operate, provides small businesses with a valuable tool with which they can support each other in offering retirement benefits to their employees.
In addition to offering greater security to companies and their employees, this fintech is working so that this type of business can overcome the challenges of a temporary phenomenon, such as the “Great Resignation.”
“Navigating the complexities of retirement savings can be quite challenging. That is why we make saving for the future more manageable and affordable,” it is pointed out on their website.
Raised $2.1 million in a pre-seed investment round led by Slauson & Co., Penelope is an intuitive, cloud-based platform whose short, to-the-point content is easy to understand and explain, even by using resources such as “FinTok” videos.
Among the most recent investors in this company are firms such as Amplify LA, Black Jays and executives from Wells Fargo, Citigroup and US Bank.
The "Great Resignation”
In the midst of this complicated panorama, in which especially workers under 41 years of age are giving up their jobs en masse, Penelope is presented as an excellent option to offer better conditions to the labor market that can generate a scenario in which people feel comfortable and safe in their workplace.
“After health insurance, providing retirement benefits is the second most frequently offered benefit to attract talent. State and city regulation is prompting more interest in 401(k) plans, too! More than one-third of small businesses that do not currently offer 401(k) plans expect to within 12 months,” Forbes points out.
Also, according to a statement by Austin Clements, Managing Partner at Slauson & Co., “saving for retirement is an essential tool for building wealth and financial equality. Penelope fundamentally changes the way small business owners and employees invest in themselves, their families and their communities.”
More and more states and cities are requiring, through various regulations, that companies offer retirement benefits to their employees. California, Oregon, Illinois, Maryland, Colorado, Connecticut, New York City, New Jersey, Virginia, Seattle, and Maine are examples of this new trend that seeks to improve the comprehensive conditions of workers in the United States.
401(k) Retirement Plan
“A 401(k) plan can help acquire and retain top talent while building stronger retirement savings for employees and owners alike. In addition, advancements in 401(k) delivery have made offering employees a defined contribution retirement plan benefit more realistic and more achievable for businesses of all sizes, with less complexity and expenses than one might think,” notes a report from JP Morgan Chase.
While former providers of this retirement plan avoided offering these benefits to small businesses due to lack of profitability, Penelope found a way to simplify the processes and make the idea of building retirement savings sound more appealing.
“Through a subscription model, Penelope’s technology platform for micro and small businesses to automate employee investing, streamlines cost and paperwork, provides practical savings tools for employees, and offers the choice of Pooled Employer Plans (PEP), traditional 401(k)s and Solo 401(k)s. With Penelope, small businesses can adhere to state regulations requiring companies with more than five employees to offer qualified retirement plans,” said a publication in Finsmes.
Jean Smart, founder and CEO, told Forbes how many small businesses, most of them owned by women, minorities and immigrants, have been able to simplify processes and reduce costs, while competing to attract and retain employees thanks to its new retirement benefits platform.
“It's hard making things simple. There are 50 to 60 thousand funds to choose from. We offer 10. The trade-off is there isn't customization,” says Smart, who was mentored by Ted Benna, known as the father of the 401(k).
“I've helped a lot of small businesses in my lifetime, as well as running my own business, and for many of them, the idea of offering a 401(k) was out of reach, expensive and confusing, filled with jargon and too time-consuming. Penelope provides plans that are easier to understand and economically make sense for small businesses and startups,” Benna stressed.