Investment choices
Employer 401k plans provide several options for employees to invest for their retirement including stocks, mutual funds, bonds, and treasury bills. Depending on the provider, they may only have a select group of funds to choose from, or a wider selection of investment options.

Company fiduciary
In order to offer employer 401k plans, a fiduciary – usually your CFO or CEO – manages the plan in the best interest of the participants. The fiduciary is responsible for providing all benefits to participants, following the plan documents, diversifying investments, and paying out the expenses. The fiduciary also ensures that employee deferrals are deposited on time.

Matching contributions
To get tax deductions, employer 401k plans require you to make matching contributions to employees’ accounts. You can either contribute a flat monthly fee to each account, a percentage of an employee's salary, or the same amount your employee contributes up to 15% of gross salary.

Vesting
If you match, a vesting schedule determines when employees take ownership of your contributions. While they own 100% of their personal contributions from day one, they must remain with the company for three to five years to own the funds you matched.

Loans
Most plans allow employees to borrow money from their accounts to buy a house, pay for hefty medical bills, or various hardships. Employees receive a low interest rate – determined by the plan administrator – and five years to pay it back. Borrowers may be subject to an early withdrawal penalty of 10% and must pay back the loan using post-tax dollars. If employees leave or lose their jobs, they have to pay back the balance of the loan immediately.