The holidays are fast approaching, bringing time spent with family and friends, delicious food, and a chance to put your feet up. Maybe you’re anticipating traveling to a new destination, visiting family or enjoying a cozy staycation.
Before you close your laptop for the year, there are a few simple things you should review with your 401(k) plan to ensure that your R&R isn’t interrupted. A few proactive checks now can help ensure your plan stays compliant and your business enters the new year with confidence.
Review 401(k) compliance testing requirements
As the year winds down, it’s best to review payroll for missed contributions and loan payments along with census data. Addressing these items early helps avoid corrective distributions and unnecessary administrative work in the new year. If you work with 401GO, we manage all required nondiscrimination testing, including ADP/ACP and other applicable tests. Having accurate information allows us to do our job smoothly.
Confirm required minimum distributions (RMDs) are processed
Ensure all required minimum distributions are accurately calculated and distributed to eligible participants before year-end. This applies to participants age 73 or older and remains a critical compliance obligation for plan sponsors.
For a more detailed overview, including RMD calculations, read our in-depth blog post: https://401go.com/rmds-for-401ks-what-advisors-need-to-know-for-a-smooth-end-of-year/
Review plan documents and participant accounts
Confirm that your 401(k) plan documents reflect any required updates, including applicable SECURE 2.0 provisions. This is also an ideal time to review recent plan amendments, eligibility requirements, and employer match rules to ensure they align with your current plan design and business goals.
Keeping documents current reduces audit risk and ensures the plan operates as intended.
Encourage employees to review their accounts
Help employees stay aligned with their goals by reminding them to consider what changes to make in the new year.
This can include:
- Deferral rates
- Investment allocations
- Beneficiary designations
Consider providing simple educational resources or a year-end review email. Even a small nudge can increase participation. These basic changes can result in big differences for employees preparing for retirement.
Plan for the new year
Looking ahead, consider what plan design updates could better support your workforce. This may include new plan features, employer matching, or enhanced employee communication and education initiatives.
Thoughtful plan improvements strengthen retention and demonstrate your organization’s commitment to its employee’s financial well-being.
Year-end is the ideal time to make sure your retirement plan is set-up for success. With 401GO, plan sponsors don’t have to navigate these reviews alone. Our team helps manage compliance and streamline administration so you can focus on closing out the current year and starting the new one strong.
