401k Administration Checklist

Diligent 401k administration is necessary for a successful program. 401k administration requires continuous and annual attention. A brief checklist of 401(k) administrative requirements is provided.

I. Continuous 401k administration

1. Are 401k documents, amendments and summary plan description current?

2. How have changes in company status affected 401k administration?

3. Is information regarding 401k enrollment and distributions regularly distributed to participants?

II. Annual 401k administration.There are three areas into which annual 401k administration can be divided. Has each been properly maintained?

1. Administrative aspects of funds entering the 401k (contributions)

A. Reconciliation of 401k employee data

B. Determination of 401k plan coverage and eligibility

C. Allocation of 401k matching, profit sharing and other employer contributions

D. Contribution testing regarding 401k nondiscrimination requirements (ADP, ACP testing)

E. Contribution testing regarding tax deductible limits, maximum individual allocation amounts and other 401k requirements (e.g., top-heavy)

2. Administrative aspects of funds within the 401k (account balances)

A. Investment earnings allocations

B. Determination of vested account balances of 401k participants

3. Administrative aspects of funds distributed from the 401k (distributions)

A. Loans. Have outstanding 401k loan balances been reconciled?

B. Hardships. Has hardship been determined objectively and consistent with the plan document?

C. Distributions upon termination of employment, retirement, death or disability

III. Reporting and disclosure of all 401k fund transactions

A. Have summary annual reports and benefit statements been distributed to 401k participants?

B. Have 5500 forms been filed with the IRS on a timely basis?

401k Plan Further Assistance

If you have 401k questions or need assistance, please complete our short form. We will reply promptly to 401k concerns of employers and their representatives. Or call us at 718-793-9885. Our web site home page contains additional useful information about 401k plans.


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