Retirement plan administration and recordkeeping are not easy to manage. These essential processes are time-consuming and require a great deal of coordination between different parties. From meeting the high level of compliance required to keeping up with changing regulations, there is much to handle. Considering these challenges, outsourcing retirement plan administration is the most efficient way to manage retirement plans.
The idea of outsourcing retirement plan administration may seem daunting, but it is not as complex as it seems. With some planning and research, you can find a specialist administration services partner to help you manage your 401(k) plan so you can focus on more important things.
Benefits of outsourcing retirement plan administration
There are many benefits of outsourcing retirement plan administration, including:
- Freeing up time for you and your employees to focus on your customers – plan sponsor and participants
- Enhancing data accuracy and improving recordkeeping efficiency
- Ensuring compliance with IRS and ERISA guidelines
- Eliminate seasonal workloads of 401 (k) Compliance Testing and Form 5500 filing
- Reduce recordkeeping and plan administration costs
Roadmap to outsourcing retirement plan administration
Keep worries out of the retirement plan administration outsourcing process by partnering with a specialist plan administration services provider. Ensure the team has enough industry experience and expertise to assess your needs. Although they would customize their services to meet your requirements, here is a simple strategy to streamline retirement plan administration outsourcing for your organization.
1. Share the data and documents: The first step in administering a new retirement plan is to gather all the necessary documentation. From plan documents to amendments, summary plan descriptions, valuation files, and sample calculations must be shared. You must also determine which data sources you will need to provide for historical and ongoing data needs. It would help if you also facilitated interactions with other service providers, such as a payroll vendor, actuary, or check writer. This process may seem time-consuming, but it will help ensure that your retirement plan is administered correctly.
2. Discuss your pain points: There must be a few key areas that make your current retirement plan administration process challenging. Identify the manual processes that you think can be automated. From data entry to ensuring employee eligibility, you must discuss all your pain points with the retirement plan administration service provider. Communication is vital to properly deploying retirement plan administration software and conducting the required training. You can help the new administrator determine the best solutions by outlining your challenges clearly.
3. Be open to suggestions: You must have picked the most suitable and knowledgeable outsourcing partner for your recordkeeping and plan administration needs. Trust them when they suggest process changes. They may share industry updates and best practices after thoroughly reviewing current processes. Based on their analysis, they may provide recommendations to remodel your 401(k) plan. It will make plan administration easier while increasing efficiency and managing costs.
4. Maintain transparency: One of the most important things you can do during the outsourcing transition phase is to keep communication lines open. It will ensure a successful transition, as you will be aware of the changes and decisions. Clear communication and transparent data sharing will help the outsourcing partner address concerns and make adjustments as and when needed.
By following these simple steps, you can confidently outsource your retirement plan administration. You can focus on more important things with the right retirement plan administration solution provider.
Congruent has been working as a retirement plan outsourcing partner for leading recordkeeping, plan providers, and TPAs in the US. We offer the technology and expertise to manage your retirement plan administration in the easiest way possible. You can contact our team to discuss your needs.