A fifth client this month asked me to review their internal controls.
Usually, they make the same mistakes:
- Wrong compensation used to calculate payroll deductions and match
- Failure to mail out participant notices
- Deferral Elections made on RK platform are not updated on the payroll system
- Failure to correctly track new employees’ plan eligibility
- Timely remittance of 401k deferrals
- No contingency plans for when a person handling administrative tasks leaves the company
“Hi Cathy,” I explained. “These employer mistakes are surprisingly common—and they lead to penalties and other problems.
“These mis-steps are often the result of having a payroll provider manage the retirement plan. Most are just not set up to handle the nitty-gritty details.
“And the rest are caused by the ever-changing labyrinth of tax laws, filing guidelines, and plan management details. HR managers are sometimes afraid to ask for help because they worry they’ll look like they don’t know what they’re doing.”
“Guilty as charged,” admitted Cathy. “I don’t want to tell my boss I’m lost in the weeds.”
“Think of it this way,” I suggested. “Here at Concierge Retirement Services, we don’t manage HR Departments. You offer plenty of specialized skills your company depends on. If it was simple for HR professionals to manage retirement plans, do you think we’d even be in business?”
Cathy laughed. “I guess that makes sense.”
“Let’s set up a time to go over your plan and your processes. We’ll figure out the strategies that will save you time, stress, and money so you can get on with doing what you do well.”