Q: What are some basic 401k administration requirements?
A: Testing contributions, developing account balances and paying terminated participants as well as administering any possible loans and hardship withdrawals are some 401k requirements. Reporting and disclosure requirements must also be satisfied. These include the completion of the forms which must be submitted when a participant enters the 401k plan, the preparation of series 5500 forms, a Summary Annual Report and a statement to participants of their account balance.
Q: What are some choices regarding 401k plan administration?
A: It is usually not advisable to perform 401k administration in-house. Third-party administration firms specialize in this function. Although mutual funds and insurance companies frequently provide this service (they sometimes work in conjunction with third-party administrators or allow the employer to select one), they often do not specialize in this 401k function.
Q: Can I better monitor the 401k administration?
A: This may be difficult. The use of a periodic, limited review by a consultant may be required.
If you have 401k questions or need assistance, please complete our short form. We will reply promptly to 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.