401k Census Aint No Joke

The 401k census is one of the most overlooked elements in the 401k world. This fact might surprise you because it is rarely discussed. I know, I know, not very exciting right? The truth is that your 401k census is as important to the 401k plan as the heart is to the body or Budweiser is to Peyton Manning (that’s a Super Bowl 50 reference).

The quality and accuracy of the compliance work is dependent on the quality of the 401k census. If the census is off, then there is a good chance the results are wrong. If the results are wrong, then the plan is being handled incorrectly and serious consequences could be looming (visualize scary DOL agents ready to pounce). Census isn’t always as easy as simply putting SSN, first name, last name, date of hire and compensation on a spreadsheet. There is more to it than that. Rehire dates, hours, equivalency methods, ownership changes, family members, date of entry compensation and accurate termination dates can all impact the end results of testing, contributions and overall compliance work.

The person responsible for submitting census data to their TPA or Bundled Administrator should take the necessary steps to ensure accuracy. If they are not sure what something means or how the plan defines something, they should reach out for clarification and guidance. This census stuff is super-duper important, did I mention that yet?

“But wait” says the Plan Sponsor, “I have a direct feed from our payroll vendor to our recordkeeper, so we don’t have to worry about all this.” Now, don’t get me wrong as I am totally a fan of this type of approach, but if you think this payroll-recordkeeper-tpa sync does not require a whole different review and audit process than I have some oceanfront property in Arizona that I want to talk to you about.

Did you know that The Retireholiks are “changing the retirement plan industry one beer at a time” Check out the webshow where we talk about a lot of cool retirement plan stuff. Available at http://www.retireholiks.com or by searching retireholiks on youtube

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s