Go beyond a basic 401(k)

Go beyond a basic 401(k)

Give your employees more than just a 401(k), join the movement.

5 min read

3 Productivity Hacks for HR Pros

Jeff Schulte
August 27, 2015
3 Productivity Hacks for HR Pros
Table of contents

Or how to stop a 401(k) plan from stealing all of your time

We talk to a lot of companies about their 401(k) plans — from what it takes to offer a 401(k) for the first time to how to keep your company’s plan running like a well-oiled machine. Along the way, we’ve seen both the joy and the pain of providing a retirement plan. For all the HR professionals and benefits experts making sure a 401(k) plan is available to the people in their company, this is for you.

Managing a 401(k) plan doesn’t have to be a bumpy ride.

True, 401(k) plan rollout material is eye-numbingly boring and convoluted. Yes, the amount of information that needs to be tracked for each employee is daunting. And there’s no real end in sight, as 401(k) plans are burdensome and finicky by default— it’s what happens when a financial product is tightly regulated by both the Department of Labor and the SEC (and rightly so).

But here’s the thing, the very tasks that make managing a 401(k) plan tedious and labor-intensive are things a modern 401(k) provider should automatically take care of.

Small business 401(k) providers frequently don’t handle the day-to-day administrative duties. This leaves HR professionals left to manage the plan by themselves using mountains of spreadsheets and manual data entry.

In this post, we’ll share three hacks every HR benefits pro needs to help boost their productivity and have their 401(k) plan running more smoothly.

#1. Get your 401(k) provider to integrate with your payroll system.

A stunning amount of manual work comes out of not having this one integration in place.

The following are the most common tasks we’ve heard HR professionals handle manually, every pay period:

  • Uploading files to the 401(k) recordkeeping system
  • Adding new employees to the 401(k) plan
  • Updating 401(k) savings each time employees make a change

There’s no reason why you should be sinking your time into managing these manual tasks. The simple fix: have your 401(k) plan seamlessly integrate with your payroll provider, or find one that does.

#2. Automatically track and send employee 401(k) plan eligibility notices.

Manually tracking new employee 401(k) eligibility in spreadsheets, calendar alerts, and to-do lists are where far too many HR professionals get into trouble. This one hack alone helps you avoid a common mistake HR benefits professionals make when it comes to running a company’s 401(k) plan.

Here’s what often happens:
Jane hires Mary, a new engineer in the company. In three months, Mary is eligible to start contributing to the company’s 401(k) plan and receive the company match. Six months go by, and Mary pops into Jane’s office to ask whether she can begin contributing to her 401(k).

If all went according to plan, Mary should have received a notice from HR often one month before she is eligible, informing her that she will be eligible to begin 401(k) contributions in 30 days. But, Jane kept this information in a spreadsheet and missed her reminder to send Mary this notice.

What happens now? A number of not-great things, not the least of which is a big administrative headache. Generally, the company will likely have to put in a portion of what Mary would have likely contributed for her, plus the company match she would have been entitled to (adjusted for earnings). Its messy, and you can find some of the details here.  

What should have happened all along? Having a 401(k) provider that handles new employee eligibility and notifications for you, automatically.

#3. Get a mid-year assessment on whether or not you look to pass the annual IRS non-discrimination test.

Companies fail this required, annual test (more on the non-discrimination test and why it exists can be found here) for the worst reason — they had no idea how they were performing that entire year.

Unless you ask for it earlier, 401(k) providers will likely give an assessment on the non-discrimination test at the end of the year. This leaves the company zero time to course-correct and get their employee base back on track. (The test takes place in January of the following year.)

If you’ve gone through this once before, you already know that the repercussions of failing this test are both costly and embarrassing. Failure could mean having to return some or all contributions to highly compensated employees for that year.

A simple trick – moving up your assessment to the middle of the year – will save you a ton of time and effort in the long run, and maintain your benefits team’s credibility with the rest of the company.

This also gives you the time to improve participation numbers in your company’s 401(k) plan — one of  the most effective ways to boost your performance and fare better on the non-discrimination test.

Truth is, the best 401(k) plan providers schedule the mid-year assessment automatically.

With open enrollment around the corner, leveling up on productivity is now more important than ever. You already know it will take a Herculean effort to get everything done this year.

Try out these hacks to save you time and effort, or see what a modern 401(k) provider can do for you.

Go beyond a basic 401(k)
Give your employees more than just a 401(k), join the movement.
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Jeff Schulte
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1 Schwab 2022 401(k) Participant Study - Gen Z/Millenial Focus, October 2022.
2 As of 12/31/2022. Employees include both current employees and terminated participants with a balance.
3 "Morgan Stanley At Work: The Value of a Financial Advisor" Morgan Stanley, March 2022.
4 Sarah Britton was a client when she provided this testimonial through an independent third party review website. She received no compensation for her remarks. There are no known conflicts of interest in the provision of her comments related to the services provided.