One of the biggest misconceptions among plan sponsors is that hiring a recordkeeper means someone else is now responsible for everything.<\/p>\n
It doesn\u2019t work that way.<\/p>\n
A recordkeeper can process payroll files, maintain participant accounts, generate notices, and provide reports. What a recordkeeper cannot do is guess what you meant to do.<\/p>\n
They don\u2019t know you hired a new employee unless someone tells them. They don\u2019t know an employee was rehired. They don\u2019t know compensation was coded incorrectly in payroll. They don\u2019t know ownership changed, a payroll vendor was replaced, or an acquisition brought in dozens of new employees.<\/p>\n
Garbage in, garbage out still applies.<\/p>\n
I\u2019ve seen sponsors blame recordkeepers for operational failures that started with missing or inaccurate information. In reality, the recordkeeper processed exactly what it received.<\/p>\n
That\u2019s why communication matters.<\/p>\n
Whenever something significant changes\u2014payroll systems, eligibility rules, ownership, acquisitions, compensation practices, even office locations\u2014your retirement plan providers should know about it. What seems unrelated to the business can have enormous retirement plan implications.<\/p>\n
The best relationships between plan sponsors and recordkeepers aren\u2019t transactional. They\u2019re collaborative. Sponsors share information early, and providers ask questions before small issues become expensive corrections.<\/p>\n
Don\u2019t assume your providers know what\u2019s happening inside your company. They don\u2019t attend management meetings. They aren\u2019t copied on HR emails. They aren\u2019t sitting in payroll discussions.<\/p>\n
They\u2019re relying on you.<\/p>\n
Think of your recordkeeper as a GPS. It can get you where you\u2019re going, but only if you enter the correct destination.<\/p>\n
The more complete and timely the information you provide, the more effective your providers can be. Communication isn\u2019t just good customer service\u2014it\u2019s an essential part of keeping your retirement plan compliant.<\/p>\n
Because no matter how sophisticated the technology becomes, your recordkeeper still can\u2019t read your mind.<\/p>\n
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