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401K Key Roles

401K Key Roles

| June 19, 2020
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When setting up or administering a 401k, profit sharing, or similar types of defined contribution retirement - business owners have key decisions to make and roles to understand.

Business owners are typically the “Plan Sponsor” when it comes to the decision making of the plan.

The owner or key business members will typically act as the plan trustees.

They have the decision of doing all the work the plan requires internally, or the ability to outsource key roles.

Three of the main roles that are typically outsourced and functions they may provide:

  1. Recordkeeping – maintenance of participant investment accounts and overall plan accounting.
  2. Administration – can be done sometimes by the Recordkeeper via bundled services or perform unbundled by a third-party. Often includes help filing forms, processing loans/distributions/contributions, keeping the plan compliant with on-going regulations, and filing annual forms.
  3. Advisory Services – help selecting the Recordkeepers & Administrators mentioned above, plan set-up or conversion, enrollment of new employees, providing on-going education, choosing and monitoring investment options, plan compliance and performance reviews, and benchmarking fees/services.

Company size, retirement planning experience, and desires will ultimately determine what jobs you do in-house or outsource.

You should consult with professionals if you ever have any questions!

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