This blog is courtesy of Jennifer Ready at HK Finanical Services and the Iowa Association of Business and Industry (ABI) and can be found on the ABI website.
Top Reasons to Integrate Your 401(k) Plan with Your Payroll Provider
Combining your 401(k) plan administration with your payroll provider might sound like putting all of your eggs into one basket, but there are some true benefits to administrators for integrating support for these two functions. Anyone who works with 401(k) plans knows there are strict compliance requirements to managing a plan. Not only are there reporting requirements, but the timing of everything that makes a 401(k) plan run smoothly, is also critically important.
Payroll impacts your entire employee base, and the 401(k) plan will eventually impact your entire employee base once employees meet your plan’s eligibility requirements. Just think if you could supply all of the census information once, and your payroll provider could in turn relay the same information to your 401(k) recordkeeper, how much time would that save you to focus on your core business? It seems pretty simple, but here are the top four reasons to integrate your 401(k) plan administration with your payroll provider.
- Time savings! Who couldn’t use more time? Let your payroll provider relay census changes, deferral changes, loan administration, calculating contributions, year-end compliance data, eligibility and entry dates to your 401(k) administrator. That equates to less hassle and less duplicative data entry and paperwork.
- Better recordkeeping of employee information. Let your administrators sync up data to make sure your records are accurate. Less mistakes make everyone happy—including the Department of Labor.
- Focus on your core business. Spend your time growing your business instead of growing your administrative headaches doing redundant work.
- Ensure more timely investment of your employee’s 401(k) contributions. Your payroll provider is processing the funding, so they can quickly transmit contributions without putting you in the middle.
Let’s face it, your payroll provider already knows your business and your needs. They are uniquely positioned to support your 401(k) administration as an additional service. And maybe you will find some cost savings in the mix!
Jennifer Ready is vice president of retirement plan services at HK Financial Services (wealth management affiliate of Honkamp Krueger & Co., P.C.). You may email her at firstname.lastname@example.org. Advisory services offered through HK Financial Services, a Registered Investment Advisor.