If you’re a business owner who is looking into offering your employees a 401(k) plan, you will want to find out about the payroll integration capabilities of each plan administrator you’re considering. The right payroll integration services will save your company time and money, plus help keep you in compliance with state and federal laws such as ERISA and SECURE. At 401GO, we offer fully automated and True360 integration, for a smooth, seamless experience.
Payroll integration is a method of connecting a 401(k) provider to a payroll provider so that contributions can be calculated and deposited seamlessly. Not all platforms offer payroll integration, and of those that do, some may offer 180 integration while others offer 360 integration.
But what is 180 and 360 integration and what does it mean to you as a business owner?
When we talk about 180 integration, we are referring to a plan administrator’s ability to directly collect important information from the payroll provider such as how much each employee contributed during a particular pay period.
It’s critically important to use accurate data, as any mistakes can have a profound impact on the funding of employees’ 401(k) plans — especially if they are not caught quickly.
With 360 integration, the data not only moves from payroll to retirement, but also the other direction, from retirement to payroll. This is enormously helpful in making sure updates made to employees’ accounts are reflected in their payroll deductions automatically and immediately.
If your small business uses a smaller or less popular payroll provider, 401GO can still deliver payroll integration services via True360. With this service, our partners grant us access to their payroll system so that we can extract the data we need. Although the True360 process is completed differently, the end result to business owners is the same — automatic deductions, deposits and updates with no work.
Payroll integration is a huge benefit for many reasons, one of the main ones being the level of accuracy it provides. The more steps there are in any process, the greater the chances for error. When your employee payroll data is sent directly from your payroll provider to your plan administrator — without going through additional manual steps at your company or elsewhere — it reduces the margin of error. No one will mistype a contribution number, transcribe it incorrectly or forget to send it, because these steps have been eliminated.
This kind of precision is not only valuable to your employees, but it also helps keep your company in compliance with laws related to the collection, management and disbursement of 401(k) funds. Violating these laws — even accidentally — can mean steep fines and penalties levied by the IRS or another governing body. It can be devastating to watch your hard-earned profits vanish that way when your intention was only to benevolently provide your employees with a valuable benefit.
As an employer — or a financial advisor — if you are concerned with security in the transfer of your data, know that when you work with 401GO, you can rest assured your data is safe. We employ bank-level security with all our data transfers and storage, so our customers can have the peace of mind they deserve without having to worry about a data breach or nefarious activity.
Top-quality payroll integration services not only safeguard your data and work to improve accuracy and compliance, but they also save countless hours of time — time your employees would otherwise have to spend manually entering data.
Payroll providers are a valuable and convenient resource, but they don’t make sense for all businesses — especially small businesses. If your business manages payroll manually, our team will offer a tutorial on how to include 401(k) contributions in your system, a process that only adds a few minutes of work for you each pay period.
True360 is especially valuable if your business doesn’t utilize one of the “big boys” in the payroll industry, like ADP or Paychex. These large providers are integrated with many 401(k) companies, but smaller providers are often overlooked. Our payroll integration service allows you to get all the benefits without the hassle or expense of switching to a larger payroll service.
With our True360 integration, we do all the work and your company gains all the benefits. When you work with 401GO, you never have to worry about how payroll integration happens and whether it’s safe — enrolling and managing the plan is a one and done.