Share
Many employers worry that offering 401k plans will bring about too many expenses, complications, and time restraints. But with 401k payroll integration software, you can streamline much of the administrative tasks that come with 401k programs, while helping to ensure compliance and efficiency. Workers have come to expect 401k plans, and standard employee benefits keep your company competitive for both hiring and retention.
Why should 401ks be integrated with payroll?
Many employee benefits are easily managed with automatic payroll deductions. This is beneficial and preferred by both employers and employees. With 401k plans, those deductions affect the employee’s tax burden, and many employers choose to match contributions. For HR and payroll specialists, 401k payroll integration makes it easier to manage and accurately handle 401k transactions.
Is 360 better than 180 integration?
Administrators of 401k programs offer different levels of payroll integration. While 180 integration allows payroll providers to pass along updates, 360 integration completes the circle by connecting back with individual employees.
- 180 integration connects the employer to the payroll provider and account information is easily relayed to the 401k provider.
- 360 integration allows for two-way communication so that individual employees can update their addresses and other key information within their employee benefits portal.
Benefits of 401k payroll integration
The best software for 401k retirement planning should include payroll integration. Here are just a few of the benefits:
Automatically maintain your payroll register
Don’t settle for manually updating your payroll register or payroll journal. Reduce your administrative burden (and costs) by automatically tracking employee deductions and contributions. Recordkeeping is a big part of HR and benefits administration, but manually copying data creates opportunities for mistakes.
Keep employee census data up to date
The employee census allows you to manage 401k plans across the workforce. Payroll and benefits administration involve tracking employee eligibility and key information, such as:
- Personal data: legal names, SSN, addresses, and DOB
- Employment records: hire dates, salary or compensation, employee status
- 401k contributions: funds that workers deferred (and employers matched)
- Quickly processes employee contributions
Workers typically contribute a consistent dollar amount or percentage of their pay to their 401k. It gets complicated when you need to calculate withholdings for every employee’s benefits for each pay period. HR software lets you automate the process and update the system whenever workers change the percentage they’d like to contribute.
Save time (and money) on benefits administration
Without HR software, employers are often lost in a tedious maze of redundant paperwork and spreadsheets. Policyholders must go through their HR contacts to make any changes to their benefits.
Shouldn’t an employee’s change of address automatically transfer between payroll, benefits, and related systems? 401k payroll Integration software makes benefits administration make sense.
Reduce the opportunities for human errors
Repetitive paperwork is hard to avoid for anyone with a career in HR. Unfortunately, manually copying and re-entering data creates opportunities for human errors. Simple mistakes can cause bigger problems when they go unnoticed.
When workers choose to set aside a certain amount for retirement planning, they should be able to trust their employer without double checking every paystub.
Compliance
401k programs are heavily regulated since employees are not (immediately) taxed on their contributions set aside for retirement. Accurate records and your employee census make it easy to verify compliance. 401k payroll integration software should collect and organize necessary data.
When your software provider specializes in HR services, they should understand the reporting requirements and help keep you prepared. With a provider like Netchex, your business has ongoing support in navigating compliance issues.
Data security
Employee information needs to be protected. According to IBM, “It takes 277 days on average to identify and contain a breach: 207 days to identify and 70 days to contain.”
Payroll and 401k records include employee payments as well as social security numbers and other sensitive data. Make sure you choose an HR software provider that’s Cyber Ready. Failure to protect employee data can impact employee loyalty and long term culture.
Employee experience
Data breaches and payroll errors are intensely frustrating for workers. Employees should be confident that pay stubs (and deductions) are mostly correct, not things they should manually verify each pay period.
Investing in reliable payroll and benefits software can help redirect a toxic workplace culture. Your workers should have the peace of mind that comes from knowing payroll and benefits will be handled accurately.’t turn every complaint into a crisis. Continue to improve the new system even after the formal change has been completed.