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Preparing the Company 401(k) Open Enrollment

Published by Kim Moore on Sep 24, 2020 6:00:00 AM

Get Ready: 401(k) Open Enrollment Time Is Near

 

Most companies offer a 401(k) open enrollment option sometime toward the third quarter. While that might still be months away, it’s never too early to start thinking about how your human resources department will prepare for the influx of questions.

 

Just as you prepare to offer your employees a new benefits package, which might include dental, medical, or tuition reimbursement, you should be ready with new information and insight on their 401(k). Among other things, you and your team should discuss plan eligibility, how to draft a clear enrollment instruction document, your company’s investment options, and how you can impart the importance of saving for retirement to your employees.

 

During your 401(k) open enrollment, your employees will want to know when they are eligible to begin contributing and when they will be fully vested. You should be able to answer questions such as these and offer insight into company matching policies. Your employees should have access to info on who they need to contact to enroll in the plan, whether a third party, an investment advisor or a member of your staff.

 

You’ll also want to take a deeper dive into investment options; some employees may want a more aggressive approach toward retirement savings. Investment options might include anything from mutual funds to company stock. You should have information on applicable options at the time of your 401(k) open enrollment.

 

Finally, your 401(k) open enrollment is an excellent opportunity to educate your employees about the importance of saving for retirement. Your staff works hard for you, and you are providing them an important benefit so that they can continue to maintain their quality of life after retirement. If possible, bring in a service provider to offer financial counseling or other insight so that your staff is armed with the knowledge they need to make the important decision to enroll in a 401(k).


Summit CPA proudly specializes in 401(k) audits. Our staff can help you ensure that your 401(k) plan remains compliant and that all employee and employer contributions are present and accounted for.

Get a FREE 401k Audit Consultation

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