Download Full 2023 Safe Harbor Guide

Download Full 2023 Safe Harbor Guide

Understand new rules for 2023, benefits of Safe Harbor and strategies to minimize Safe Harbor costs.

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401(k) Census – A Short Overview On What It Is And Why It Matters

Evan Ross
June 12, 2018
401(k) Census – A Short Overview On What It Is And Why It Matters
Table of contents

Is your third-party provider pestering you for your plan’s census?

The census is a 401(k) administration document chock full of detailed employee information. Your provider uses the information for annual non-discrimination testing. These tests measure how broadly your 401(k)’s benefits are spread among company employees. The census should be completed in the first part of the plan year to meet filing deadlines.

Accurate 401(k) Census Records are Critical for Accurate Testing

For accurate test results, the employer must provide an accurate census. Among the most critical inputs is identifying Highly Compensated Employees (HCEs). That’s because comparing how benefits are distributed between HCEs and Non-Highly Compensated Employees (NHCEs) is the crux of non-discrimination testing.

It’s also important to understand that failing to identify eligible NHCEs can impact results.

Completing the 401(k) Census Form

Your provider may ask you to complete a hard copy census form, or direct you to a pdf document online. Or they may ask you to complete and return a spreadsheet. Some of the most requested employee data for the annual census (for the plan year that has just ended) include:

  • Employee name
  • Date of birth
  • Social Security Number
  • Hire date(s)
  • Termination date(s)
  • Plan Compensation
  • Hours worked
  • Employee deferrals
  • Employer match contributions
  • Employee ownership of the company
  • Employee officer status
  • HCE vs NHCE status

This all may seem straightforward, but some data can be trickier to pin down than you might think. For example, IRS definitions of an HCE include:

  • Anyone who was a 5% owner, directly or by family attribution (if they are a child, parent, spouse, or grandparent), at any time during the current or prior year
  • For the prior year, an employee who was paid more than $120,000 (for 2015-2018).

Also, the employer can choose to define HCEs as those in the top-paid (top 20%) group of employees.

It’s important to note that “compensation” can be defined in different ways. For the census, you should use the definition provided in the plan document. Census data may also be used to track vesting. So, it’s important to have accurate hiring dates along with hours worked, if applicable.

Ok, Preparing a 401(k) Census Sounds Like a Lot of Work…

Preparing a census takes some serious time that could be spent running your business. This is particularly the case if information comes from different data files, or is prepared by different employees. And someone should review the information employee-by-employee to make sure it is accurate.

At ForUsAll we understand you would rather run your business than fill out census forms. That’s why we designed a 401(k) where we do most of the work for you. We can sync your payroll data to a recordkeeper, and automate much of the day-to-day 401(k) tasks. And we limit the information we need from you to prepare the census.

Here’s the deal. We administer your 401(k). You run your business. Our focus is the blocking and tackling required to administer your plan. We automatically keep savings rates up-to-date, load participant data, and so much more.

ForUsAll offers engaging technology that’s great at attaining high participation and deferral rates. This makes for a healthy 401(k) and increases the odds of passing non-discrimination tests. Good test results mean you can avoid corrective action. You may be able avoid the high costs of a Safe Harbor Plan as well. You can learn more about ForUsAll’s innovative technology here.

Talk to us today to find out how we can take on much of your census burden. And ask us how we can help you can pass those compliance tests. We’re always happy to walk you through the details of ACP testing and chat about keeping your plan compliant.

Download Full 2023 Safe Harbor Guide
Understand new rules for 2023, benefits of Safe Harbor and strategies to minimize Safe Harbor costs.
Evan Ross
About Author -
Evan Ross
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This material has been prepared for informational and educational purposes only and should not be construed as a recommendation by ForUsAll, Inc., its affiliates or employees (collectively, “ForUsAll”)  to activate a cryptocurrency window or invest in crypto.  Investing in crypto can be risky and investors must be able to afford to lose their entire investment.  You should consult with your own advisers before activating a cryptocurrency window or investing in crypto.  ForUsAll does not provide legal, tax, or accounting advice. Please refer to your Plan's fee disclosure for more details.© 2023 ForUsAll, Inc. All rights reserved.
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.