While most people consider Labor Day to be the unofficial first day of autumn, those of us in the retirement savings business think the season changes on October 1st: Safe Harbor Day. That’s the date by which plan sponsors must adopt a new safe harbor 401(k) for the calendar year.
Here in Utah, the first week in October is usually when fall leaves are at their most colorful. Students are already bored with their new classes. The days average a comfortable 70 degrees while nights get chilly and sweaters are required. That feels a long way off from a mid-July day like today, with kids at play, sunflowers in full bloom and the mercury threatening to break 100 well into the foreseeable future.
So why are all the other 401(k) providers getting all worked up on social media, saying it’s urgent that the process of creating a new safe harbor plan must begin immediately if that distant deadline is to be met? Is it possible their calendars are broken?
One post in particular actually features video of a plan consultant on a sweltering golf course warning, “We need signed paperwork by August 30th. A lot of the record keepers actually need signed paperwork by mid-August…in order to be a safe harbor plan. I know a lot of people have been enjoying their summer, but deadlines are coming up!”
How fast can 401GO set up a safe harbor 401(k) plan?
It’s all a bit foreign to us at 401GO because our technology and automation can get a safe harbor 401(k) set up in about 15 minutes. That means we’d be safe if we started posting gentle deadline reminders around noon on September 30th.
The difference is, the others use the outdated legacy technologies that actually do require weeks and sometimes months to accomplish what we can in less time than it takes to mow your back yard.
So do enjoy your summer, take your vacation and come see us when the kids are back in school. That’ll be more than enough time to get your safe harbor 401(k) plan set up, with all the many benefits that entails, including significant tax advantages and reduced administrative burden.
If you would rather get that conversation started today, we’re up for that, too.
