But what about for employers? Offering a 401(k) to your employees is a great benefit that can set you apart and help you attract the best employees. But setting up and managing 401(k) information can be extremely difficult without the right software.
There are plenty of reputable companies out there that will manage your employees’ 401(k)s for them. They’ll find the right investments and offer the best options to make the most of the funds. And while it’s important to find the right 401(k) company to manage these accounts, it’s only half the battle.
The other part of it is finding the right 401(k) software so you can send all of the information you have about your employees that the 401(k) provider needs without any hiccups.
Since 401(k)s are heavily regulated by the IRS and the Department of Labor, there are a lot of rules that need to be followed. And small errors in reporting can cause enormous headaches for you and your employees.
401(k) reporting software takes all of your employees’ information and keeps it in a single location. Manual data gathering and entry are one of the best ways to ensure errors, and reporting software helps mitigate those issues.
How many of your employees have unique names, or names with unusual spellings? How many people in your organization have the same first name? Or the same last name? Do you have any employees who have names with multiple common spellings? These are all issues that can arise when manual data gathering is the only way to transfer information.
Social Security numbers are one of the most essential parts of our identities, and errors in their input can lead to big problems. With a quality 401(k) reporting system, you’ll enter the Social Security numbers once and be done. Plus, these programs offer an extra level of security, so you and your employees can feel sure their information is secure.
Most retirement programs deduct a specific amount (decided by the employee) from each paycheck, and reporting software helps connect your payroll system to your 401(k) system, so the right amount is deducted and transferred to the right place, for the right employee.
Employers who offer company match programs for 401(k)s can use reporting systems to help keep track of those contributions. If the employee wants to increase or decrease their contribution amount, the system should be able to make automatic adjustments, so you don’t have to pull out your calculator and dust off your 10th-grade math skills. And if any of your employees receive raises, a quality reporting system can help recalculate the numbers to ensure the same contribution amount is being deducted.
But most importantly of all, 401(k) reporting software helps you stay compliant and on top of things. Unless you’re a whiz at payroll and love doing this kind of calculation by hand, a 401(k) reporting software can make a real difference in your organization.