If you’re thinking about offering a 401(k) plan to your employees, you’re already on the path to being a workplace hero. But let’s be real—sponsoring a 401(k) comes with some serious responsibilities.
Don’t worry, though! I’m here to break down 7 key areas you need to know about in a way that’s easy to digest, and I’ll show you how 401GO, a top-notch retirement plan provider, can make your life as a plan sponsor a whole lot easier.
Act in Participants’ Best Interests
As a plan sponsor, you’re an ERISA fiduciary, which means you’ve got to put your employees’ interests first. Think of it like being the captain of a ship—your crew (the participants) are counting on you to steer them toward a secure retirement. This means choosing a plan wisely, keeping fees low, and avoiding any conflicts of interest. It’s all about doing right by your team.
How 401GO Helps: 401GO takes fiduciary responsibility seriously. We offer 3(16) administration services, handling day-to-day plan management. And, while we provide 3(38) fiduciary services for our plans, we also partner with financial advisors as well as firms like Mesirow, which cover investment selection and monitoring. Our platform automates compliance and provides a diverse, low-cost fund lineup, so you can rest easy knowing your employees’ interests are front and center.
Keep Plan Documents Up to Date
Your 401(k) plan document is like the rulebook for your plan. It outlines everything from contribution rules to vesting schedules, and it needs to comply with ERISA and IRS regulations. Outdated documents are a recipe for trouble, especially with new laws like the SECURE 2.0 Act shaking things up.
How 401GO Helps: 401GO’s guided setup process creates tailored plan documents in minutes, not weeks. Our technology ensures documents are compliant with the latest regulations, and they handle updates so you don’t have to sweat the legal details. It’s like having a compliance expert in your pocket.
Perform Nondiscrimination Testing
Nondiscrimination testing ensures your 401(k) plan doesn’t favor highly compensated employees (like executives) over everyone else. The IRS requires these tests annually, and failing them can mean costly fixes. It’s all about making sure your plan is fair and inclusive.
How 401GO Helps: 401GO’s automation is a game-changer here. Unlike traditional providers that test once a year, 401GO runs ongoing compliance tests, catching potential issues early. If something’s off, we’ll notify you with plenty of time to make adjustments, keeping your plan fair and IRS-friendly.
File Form 5500
Form 5500 is your annual report card to the Department of Labor (DOL). It details your plan’s financials, participant data, and compliance status. Missing deadlines or filing errors can lead to penalties, so accuracy is key.
How 401GO Helps: 401GO will prepare, sign, and file Form 5500 for you, ensuring it’s accurate and submitted on time. All you need to do is a quick review. It’s one less thing to stress about.
Provide Participant Education
Your employees need to understand their 401(k) plan to make the most of it. Educating them on contribution strategies and retirement goals (without giving personalized advice) is key to boosting engagement and confidence.
How 401GO Helps: 401GO provides 401Goals™—a full suite of financial wellness tools—with every plan. It includes a mobile app with retirement calculators, budgeting tools, and educational articles. Participants can even access personalized portfolio recommendations from the 401GO Strategy Builder.
Clear Participant Communication
Good communication keeps your employees in the loop. From fee disclosures to summary plan descriptions, you’re required to share information clearly and on time. Plus, regular updates about plan features or market changes can keep participants engaged.
How 401GO Helps: 401GO’s user-friendly platform makes communication a snap. Participants can access plan details, change investments, or request disbursements with a few clicks on their phone or computer. 401GO also handles required disclosures automatically, ensuring compliance and clarity. Our dedicated relationship managers are there to guide you through any participant questions, too.
Staying Informed: Keeping Up with the Times
The 401(k) world is always evolving—new laws, DOL guidance, and industry trends pop up regularly. Staying informed helps you make smart decisions and avoid compliance pitfalls. Think of it as keeping your plan’s GPS updated.
How 401GO Helps: 401GO stays ahead of the curve, integrating the latest regulatory changes (like SECURE 2.0) into their platform. Our blog and webinars offer insights on topics like state mandates and Safe Harbor plans, and our support team keeps you in the know. Plus, partnerships with industry leaders bring cutting-edge solutions to your fingertips.
Let Us Do the Heavy Lifting
Sponsoring a 401(k) plan is a big responsibility, but it’s also a fantastic way to invest in your employees’ futures and strengthen your company. By focusing on these areas—acting in participants’ best interests, maintaining plan documents, ensuring compliance, and supporting your team with education and communication—you’ll set your plan up for success. And with 401GO by your side, you’ve got a partner that uses cutting-edge technology and human-touch support to make it all feel effortless.
Ready to get started? Explore our affordable, customizable plans and see how our 15-minute setup can have you offering a top-tier 401(k) in no time. Your employees will thank you, and you’ll feel like a retirement rockstar!
