Why Your 401(k) Needs a Recordkeeper

When you start setting up a 401(k) for your company, you will begin to see that there are a lot of parties involved. You have a Financial Advisor, a Recordkeeper, and a Third Party Administrator. Each one of these parties plays an important role in running a successful 401(k).

It is uncommon, but occasionally we run across a company that is doing the 401(k) work manually, without a recordkeeper. One of the questions we get asked frequently is, “why do we need to hire a recordkeeper?” Although it is doable to go without, we do not advise setting up your 401(k) this way, and in this post, we are going to cover why.

The best way to explain this is to define roles. There is usually some confusion (we’ve had people ask us wait, Don’t you keep the records?, to which the answer is, No, that’s the recordkeeper’s function.) Here’s a simple breakdown of who does what:

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Duties of 401(k) Advisor (like TrueNorth Retirement Services):

  • Assist clients with choosing the best 401(k) design

  • Set up the 401(k)

  • Create and monitor the fund lineup (act as the 3-38 fiduciary of the plan)

  • Ensure 401(k) plan continues to meet client needs

  • Help employers choose the right Recordkeeper and TPA

  • Provide 401(k) education for employees

Duties of a 401(k) Recordkeeper:

  • Provide website and materials to make participant experience easier

  • Process employee enrollment and produce education materials

  • Manage and track employee’s investments (this includes trades and conversions)

  • Log all contributions and keep track of what type they are (pretax dollars, rollover, Roth, employer match, etc.)

  • Provide plan documentation to employees

  • Manage employee withdrawals (hardship, leave a job, etc.)

  • Provide customer service to participants

  • Provide QDIA options in the fund lineup

  • Print and mail account statements to participants

  • Update processes as regulations change

We can assure you that using a recordkeeper will decrease your fiduciary risk, decrease the amount of administration work of a 401(k), and give your participants a significantly better user experience.

Helping You Find the Right Recordkeeper for Your Company

At TrueNorth Retirement Services, we will find the recordkeeper that best fits our client’s needs. If you have any questions about 401(k) plans, recordkeepers, or anything else, feel free to call TrueNorth Retirement Services at (801) 274-1768 or visit us online at https://www.tnrs.com.



Safe Harbor 401(k) Plans – 3 Things You Need to Know

Let’s get this out of the way – we, at True North Retirement Services, really like Safe Harbor 401(k) plans.

The reasons should resonate with anyone looking to offer a 401(k) plan. We like them because they are very desirable from both an employer and an employee standpoint. Classic win-win.

For employees, they are seen as one of the better types of 401(k) plans, so a Safe Harbor 401(k) is more likely to better contribute to employee attraction and retention (which is part of the reason you have a 401(k) plan in the first place, right?). Employees tend to save more for retirement, and there’s no downside to that.

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What Retirement Plan Makes the Most Sense for Your Business?

What Retirement Plan Makes the Most Sense for Your Business?

As a business owner, you know that offering a retirement plan is a key factor in attracting and retaining quality people. In fact, in today’s business environment, it’s a must if you want to stay competitive.

It’s also a must if you have just a few, or even no employees besides yourself and perhaps a spouse. That’s because small business owners need retirement savings as well, and a company retirement plan is one of the best ways to accomplish this. Retirement plans also can have significant tax advantages, so even if your retirement savings are handled elsewhere, a company retirement plan still makes sense.

But what type of retirement plan should your company offer?

How Much Does Your 401(k) Plan Cost Participants?

How Much Does Your 401(k) Plan Cost Participants?

As important as retirement planning is, it’s surprising that more people do not know how much their 401(k) savings plan costs them. In fact, according to a survey by the National Association of Retirement Plan Participants (NARPP), nearly 58% of plan participants do not know how much they’re paying in plan fees. Additionally, of the participants that did report knowing how much they’re paying, only a quarter of them know how those fees are calculated.

Automatic Enrollment Increases 401(k) Participation in Small Plans

Automatic Enrollment Increases 401(k) Participation in Small Plans

When Congress passed the Pension Protection Act (PPA) in 2006 the primary focus was on defined benefit plans designed to protect pension plans funded by employers. Defined contribution plans like 401(k) plans, however, were also largely affected by the legislation. In fact, the act created plan incentives to help employers and employees reap more benefits from 401(k) contributions.

9 Considerations for 401(k) Plan Sponsors in 2017

9 Considerations for 401(k) Plan Sponsors in 2017

With changing markets, the current political landscape, and new industry regulation, it’s important for 401(k) plan sponsors to actively manage sponsor plans. Today’s employee faces more challenges than ever before; in fact, retirement, once considered the pinnacle of financial goal-setting, is now one of a myriad of issues the modern employee faces. Additional monetary concerns like student loans and the cost of housing are now common issues employees juggle alongside retirement.

What You Need to Know About Year-end Bonuses

What You Need to Know About Year-end Bonuses

As the holidays approach, it’s time for businesses to consider what year-end, Christmas, or holiday bonuses they’ll give to employees. Providing year-end bonuses can be a great way to motivate employees and reward top performers. Along with deciding criteria for employees to earn bonuses, many businesses need to factor in the effect of bonuses on overall yearly compensation and taxation requirements.

Retirement Plan Options for Nonprofit Organizations & Employees

Retirement Plan Options for Nonprofit Organizations & Employees

Retirement savings plans are designed to help employees save money to enable a comfortable, secure lifestyle during retirement. From the business sector to NGO organizations many different retirement plans exist. Most commonly people are familiar with 401(k) typically offered by corporations to its employees and IRA’s (both roth and traditional) which are more widely accessible. For nonprofit organizations there are unique plans available in creating retirement savings plans.

Are Retirement Plans the Next Big Tobacco?

Are Retirement Plans the Next Big Tobacco?

When the first 401(k) retirement plan was established back in 1980, it was envisioned as the third pillar of the retirement savings trinity. Social Security would account for basic expenses, your pension plan would help you maintain your current standard of living, and your 401(k) would provide discretionary funds (i.e. “fun money”). Together, these three would provide hard-working Americans with a variety of vehicles to save for a comfortable retirement.

Considering Your Benefits Approach: New Hire Procedures and Protocols

Considering Your Benefits Approach: New Hire Procedures and Protocols

As a small business owner one of the biggest joys can be seeing your company grow and expand. As your business increases, however, there are additional variables to consider. You may need to start hiring more people to take over duties and responsibilities and it’s important to start the on-boarding process in an efficient and effective manner for all parties. Considering your benefits approach when it comes to new hires and protocols is an important first step.