Did your 401(k) plan service provider send you a request for an employee census update? This usually happens quarterly or annually. It often looks like they have most of the information already, so why is this a big deal? After all, your time is valuable, and you are paying your service provider to administer your profit sharing plan for you, right? Isn’t it all right to just tell them to use the information they already have?
Well, it’s not quite that simple. Your service provider needs accurate census information in order to do their job – administer your plan. They need it to make sure that all employees are properly included or excluded as participants in your plan, that the annual or quarterly IRS-required testing they do for your plan uses the correct information, that your plan is properly categorized as a small or large plan for DOL reporting purposes, etc.
If you still don’t think you have time to deal with a 401(k) plan service provider’s request for an employee census update, why not see if your accountant can help? After all, they often already have access to your payroll information, and they understand how the service provider will use this information to administer your plan. If you would like more information on this service, give us a call at 330.666.4199 and we can help you comply with the request in a timely, unobtrusive manner, leaving you more valuable time to run your business.
Written by: Debra D. Ondrik, CPA