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Improve Your 401k: Move from Manual to Automated Deferral

At the conclusion of The Plan Sponsor University (TPSU) Program at University of California Berkeley, Fred Barstein, Founder and CEO of TPSU, interviewed Ms. Deborah Beyea, Deputy Director of a Non-Profit organization in the bay area where she serves the organization by heading the Human Resources, Finance and Legal departments.

Upon joining the organization Ms. Beyea analyzed the organization’s 401k plan processing and how it interfaced with payroll.  She realized she had inherited a manual process between Payroll and 401k deferrals. She knew there was an opportunity to improve the 401k. The efficiency was realized by moving from a manual payroll process to an automated deferral process.

The automated payroll with 401k deferrals for the organization’s 58 employees has worked well since the conversion.

As the result of this TPSU Program the firm will also be looking at improved practices around 401k education for employees.

See Full Transcript Below

Fred Barstein:               Greetings. This is Fred Barstein. We’ve just completed a TPSU program at UC Berkley and I’m here with Debbie.

Deborah Beyea:            Right.

Fred Barstein:               Who is a repeat offender with us. Been to our program before. Debbie, okay if we ask you a few questions?

Deborah Beyea:            Yes.

Fred Barstein:               Okay, great. Before we do, just tell us a little bit about yourself and the size of your organization and your role there.

Deborah Beyea:            Well, I’m the deputy director, so I’m in charge of HR, finance, legal advising, those sorts of things. We have about 58 employees at our organization.

Fred Barstein:               Are you a not for profit?

Deborah Beyea:            Yes, we are non profit. Correct.

Fred Barstein:               And so in the program today, you talked about moving from manual to automated processing. What did you automate actually?

Deborah Beyea:            So when I started at the organization initially, it was a manual process completely. Doing the upload of the …

Fred Barstein:               Payroll.

Deborah Beyea:            … Payroll information regarding 401k deferrals.

Fred Barstein:               Yes.

Deborah Beyea:            That was all done manually by our financial manager. It was very cumbersome.

Fred Barstein:               Yes.

Deborah Beyea:            It was also subject to error and forgetfulness, so we did have a couple of instances where there had been a delay beyond the time that there should have been a delay, you know in getting people’s deferrals deposited. And so, that was a big concern to me. So pretty quickly, I started to check with our payroll provider and we do have an outside agency that does that for us.

Fred Barstein:               Right.

Deborah Beyea:            And to inquire to see whether they could do that upload for us, and how much we could automate it. So it took some work, and you know, some back and forth.

Fred Barstein:               Right.

Deborah Beyea:            To figure out how that could be accomplished. We had to work with our record keeper and put them in contact with our payroll provider. So it required three-way communication.

Fred Barstein:               Right.

Deborah Beyea:            Sometimes on a conference call to get that set up, but it was well worth the time spent. It eliminated errors. There was a little bit of work again to iron out the wrinkles during the process. But once we had that done, and that’s been, oh gosh, at least eight or nine years ago. And I’ve been there 10 years. So it’s been wonderful.

Fred Barstein:               Right. And did it take a long time to get that going?

Deborah Beyea:            It was probably about a couple of months.

Fred Barstein:               Right.

Deborah Beyea:            Just staying on it and trying to iron out the wrinkles, but yeah.

Fred Barstein:               And you had to rely and make sure the record keeper and the payroll vendor talked to each other?

Deborah Beyea:            That’s right, that’s right. And we had a bi-monthly payroll, so that’s really just probably three payrolls that it took to iron that out.

Fred Barstein:               Okay.

Deborah Beyea:            So really, that’s not that many, you know, that it took.

Fred Barstein:               Final question. I know you’ve been here before. A couple of new things you learned, or you might want to take back from today.

Deborah Beyea:            Oh yeah, it was great. I think today what I took back is the frequent education opportunities for the staff. That’s something that we haven’t done. We’ve generally stuck to once a year.

Fred Barstein:               Yeah.

Deborah Beyea:            So it really made an impression on me today, that doing it even monthly or at least quarterly …

Fred Barstein:               Right.

Deborah Beyea:            … Could be super beneficial to us.

Fred Barstein:               One piece of advice, bring pizza.

Deborah Beyea:            That’s right. We know in our organization, food talks.

Fred Barstein:               [crosstalk 00:03:36]. Or a food truck could be better.

Deborah Beyea:            Yeah.

Fred Barstein:               Great. Well, thanks for your time today. Thanks for attending again, and thank you for watching 401kTV.



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