How to Identify Quality Recordkeeping

By Gerri Wheeler

Today I received such a great question from a participant in the “Plan Administration Seminar” that ACI sponsors that I had to share. The participant asked, “What can a Plan Sponsor look for to assure that their Recordkeeper is providing quality recordkeeping?” In response, there are several touch points that we can recommend:

· Monitoring the “Ins” – As a Plan Sponsor, you have the ability to track and monitor the contribution actually made to your plan. When you make a deposit of deferrals, matching, loan repayments, rollovers or employer contributions, double check that the totals imported match the totals received. If you can match your totals, you can be assured that the import has worked correctly.

· Monitoring the “Outs” – When a distribution occurs, review the amount actually distributed to the participant to the elections the participant made on their distribution election forms. Check for correct address. Were taxes withheld as directed?

· Paper Investment Elections (vs. Website) – Check to make sure that the Recordkeeper has correctly recorded the participant’s instruction on the investment election.

· Cash Account – does the activity in the cash account make sense? For instance, you can see your deposits that match payroll and the withdrawals that match the distribution instructions. Are forfeitures moved into this account when an ex-employee receives a distribution? Are there fees paid from this account, if so, to whom?

· Education – does your recordkeeper keep you informed of legislation that affects the operation of your plan? Do they provide reports that help you monitor the activities of the participants? Are they suggesting that an enrollment meeting occur?

If you have any other questions please don’t hesitate to contact an ACI consultant or your plan administrator. We have the knowledge. Let us share it with you.