How to stay organized and save time as a 401(k) recordkeeper

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Devin Miller
November 21, 2022

The right strategies can safeguard your time, improve your services, and keep the records organized 

As a 401(k) recordkeeper, you have a lot of information to keep organized. If you drop the ball, plan participants may lose out on investment opportunities. You also risk facing compliance issues. 

With so many moving parts, how do you keep it all together? By paying close attention to detail, creating a dedicated organizational system, and investing in the right tech tools to help. Take a look at these organizational tips for 401(k) recordkeepers. 

Have a dedicated onboarding process 

As a recordkeeper, you have to manage a lot of details about plan participants, their investments, and how money flows in and out of their accounts. To save time and avoid mistakes, make sure you have a dedicated onboarding process for adding new clients to your plan. 

Ideally, the process should be completely repeatable. You may want to create a checklist to keep you on track. This helps ensure you don’t overlook any details and makes it easier to train new people when the time comes for you to hire assistants. 

Automate as much as possible 

Manual data entry can take a great deal of time and is prone to the introduction of errors in data. By automating as many processes as possible, you can improve the integrity of your records and save yourself time. 

For instance, you may want to invest in a retirement account management system that ensures participants don’t contribute more than their annual allowance. Keeping tabs on this manually can be cumbersome. 

Issue 401(k) disclosures and statements as required

As a  recordkeeper, you’re responsible for issuing disclosures and statements to participants. You need to issue a summary plan description that outlines the basic details of participants’ 401(k). If you make changes to this document, you’ll also need to issue a disclosure. 

Plan participants will also need to be provided with individual benefit statements. These statements must be issued quarterly for participant-directed accounts and annually for accounts that don’t offer participant direction. 

Once a year, you’ll also need to provide participants with an annual summary report. It is also imperative that you file. You must also file the right forms with the government. Finally, if you’re going to have a blackout period, you need to alert participants in advance. 

Maintain your website

Whether you work directly for the employer that offers the 401(k) or for a firm that provides recordkeeping services for multiple employees, you must maintain a website. To be compliant with government regulations, you have to  provide a website where participants can access their account information, check their balances, and look into their investments. 

Ensure employees have a clear understanding of how to access and use the website. To prevent data breaches or downtime, test your website on a regular basis. When hiring IT specialists to work on your website, be certain they have knowledge and experience within the financial industry and understand the compliance rules for 401(k) management. 

Have clear support channels for clients and participants

If you maintain 401(k) records for a variety of businesses, you need to be responsive to your clients. Make sure they know how to reach you, and respond to their calls for help promptly. Have dedicated channels for support and communication. 

This is also important if you work directly for the employer who offers the 401(k) plan, but in this situation, you need communication channels for plan participants. This can include anything from a basic email, a help desk ticket, virtual meetings, or a contact request via the plan’s website.

To save yourself even more time, allow clients and participants some autonomy over their accounts by providing them access to self-help materials. They’ll feel better knowing they can easily find the answers they’re looking for, and you will have more time to focus on everything else you need to do. 

Don’t take on unnecessary tasks 

Your primary job as a recordkeeper is to maintain clear and well-organized records. You don’t have to provide investment advice. You don’t need to design the plan or educate participants about their options. You also don’t have to ensure your clients are compliant with IRS requirements or nondiscrimination laws. That responsibility falls on them. 

Whether you work with clients or directly for an employer, make sure your role is clearly identified. Don’t take on unnecessary tasks that may prevent you from staying on top of your core organizational and recordkeeping duties. 

Look for ways to build value for clients and save yourself time 

When you provide services to businesses, there are always other professionals competing for your clients. To attract and retain your clients, look for ways you can build value into your offerings. For example, you may want to look into offering an emergency savings account (ESA) along with your 401(k) offerings. 

This can also be incredibly valuable for recordkeepers who work directly for the employers who offer the plans. Over 50% of the U.S. population doesn’t have any emergency savings, and they often end up dipping into or cashing out their retirement accounts when they need extra cash. By bundling an ESA with your 401(k), you allow plan participants to safeguard their retirement savings. This builds value for your customers, but it can also save you time on processes related to issuing loans and closing 401(k) accounts. 

In the United States, recordkeepers manage trillions of dollars of employees' savings accounts. As a recordkeeper, you play a critical role in the nation’s economy and the individual lives of your plan’s participants. In addition to staying organized and compliant, you may want to find ways to enhance the services that you provide. 

Learn more about the advantages of these savings accounts and how to make them part of your company’s retirement plan or benefits package.

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