The U.S. small business retirement market has undergone a quiet but significant reshuffle. Provider Guideline was acquired by Gusto, but only in part. The remaining business was moved to a new entity, Accrue 401k, and then sold to Vestwell. For HR professionals and business owners, this is not just financial news. It directly affects your 401(k) plans and who manages your employees’ savings. Here is NACSHR’s analysis.

Guideline’s Rise and Fall

Guideline was once a star in the SMB 401(k) space. It offered low fees, automation, and deep payroll integrations. This attracted many employers using QuickBooks, Gusto, and Rippling. It represented the “fintech recordkeeper” model. This model uses technology and scale to challenge high fees and inefficiency.

But this model faced inherent challenges. First, ultra-low fees require massive scale to be sustainable. Second, state mandates and compliance increased tech costs. Third, payroll platforms began offering their own 401(k) services. Partners became potential competitors. Guideline became infrastructure that payroll providers needed to acquire or rebuild.

Gusto’s Strategic Move

In 2025, Gusto announced its acquisition of Guideline. The deal was worth about $600 million. But Gusto didn’t buy the whole company. It only took the part it truly wanted: clients deeply integrated with Gusto Payroll.

Gusto’s logic is clear. It seeks an integrated “Gusto Payroll + Gusto 401(k)” experience. This controls the entire process from payroll to retirement deposits. It increases client loyalty and lifetime value. It also differentiates Gusto from rivals like ADP and Paychex. Guideline clients using other payroll systems held no strategic value for Gusto. In fact, they represented competition. That’s why Gusto didn’t take the entire business.

The Other Half: Accrue 401k’s Temporary Role

What happened to Guideline clients not on Gusto Payroll? In early November 2025, these plans were moved to a new entity: Accrue 401k. This was designed as a transitional platform. It was not Gusto or Guideline. It was a temporary holder for the plans Gusto left behind.

This was a sizable block of business. It involved nearly 30,000 retirement plans and about 350,000 savers. These clients used various payroll platforms like QuickBooks, Rippling, and Paylocity. Creating Accrue 401k served two purposes. It cleaned up Gusto’s acquisition structure. It also provided continuity for the affected clients while a permanent buyer was found.

Vestwell Takes Over

Vestwell emerged as the natural buyer. It is a fintech focused on “payroll-connected savings.” It provides the tech backbone for 90% of state retirement programs. It integrates with nearly 200 payroll providers. Its model isn’t tied to one payroll system. It serves as unified savings infrastructure for a multi-payroll ecosystem.

Vestwell has agreed to take over these 30,000 plans. It will migrate them to its own platform. For the businesses, their payroll system stays the same. Their retirement service provider shifts from Guideline to Accrue to Vestwell. For Vestwell, this quickly expands its SMB client base. It strengthens its role as a universal savings layer.

The Underlying Shift

This series of events reveals a deeper structural change. The competition is shifting. It’s no longer just about comparing recordkeeper products. Now, it’s about who controls the payroll system gateway. That party controls the retirement savings initiative.

Gusto represents the “vertical integration” path. It brings 401(k) fully into its own payroll ecosystem. Vestwell represents the “horizontal infrastructure” path. It doesn’t do payroll itself. Instead, it provides unified tech for many payrolls and programs. Guideline’s split is a practical division of these two logics. The Gusto-integrated part became part of a vertical loop. The multi-payroll part went to an infrastructure specialist.

For small businesses, the provider may change due to upstream strategy. This reminds us that in the 401(k) market, the payroll ecosystem behind a brand is becoming more critical than the brand itself.

Structural Impact on the 401(k) Market

These deals will have several market impacts. First, the industry will see more concentration and specialization. On one end are integrated platforms like Gusto. On the other are white-label infrastructure providers like Vestwell. Traditional standalone 401(k) providers may struggle to compete.

Second, tech and compliance barriers are rising. State mandates and federal laws are expanding. Data privacy and cybersecurity demands are growing. This requires continuous heavy investment in systems. Guideline’s split is a real-world response to a question. Can a lean, low-fee platform handle the full stack alone?

Finally, participant mindsets are changing. Payroll platforms and advisors now realize something. “Product packaging” and “fee comparisons” alone are not enough. The real sell is reducing HR’s workload and ensuring automatic compliance. This will push more vendors toward integration and automation.

NACSHR’s Advice for SMB HR

This Guideline-Gusto-Accrue-Vestwell chain should make you rethink your selection criteria. Don’t just focus on minor fee differences or app aesthetics. Consider these key factors.

First, start with your payroll system, not a 401(k) brand. Your payroll choice largely determines your natural 401(k) path. Gusto users will find Gusto 401(k) deeply embedded. Users of QuickBooks, Rippling, or Paylocity should check their integration with infrastructure platforms like Vestwell. Ensure payroll and retirement deductions sync automatically.

Second, treat “automation” and “compliance” as essential. Good 401(k) selection reduces HR’s manual work. The system should handle data sync, eligibility, deductions, and testing automatically. Ask potential providers specific questions. How quickly do payroll changes reflect in the 401(k)? When are new employees auto-enrolled? How much annual testing data is auto-generated? These answers matter more than a minor fee difference.

Third, consider the provider’s “long-term strategic position.” Guideline’s split shows standalone platforms can be forced to change course. Players deeply embedded in payroll or serving as multi-party infrastructure tend to be more stable. Small businesses can’t control mergers. But they can choose to align with a more resilient layer. This could be your essential payroll platform or an established infrastructure provider.

In summary, Guideline’s split is not just one company’s story. It reminds all small businesses to upgrade their decision-making framework. Move beyond asking “which product is this?” Instead, ask “what is its position in the wider payroll and benefits ecosystem?” That is the lasting insight from this merger and split.

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