Fred Barstein, CEO & Founder, TPSU/TRAU/401kTV with Carlos, Plan Sponsor/HR Director
Payroll integration, which involves the seamless communication and data exchange between a company’s payroll system and its retirement plan record keeper, is essential for ensuring the accuracy and efficiency of managing employee contributions, deferrals, and other retirement plan-related data. However, when this integration is lacking or communication between the record keeper and payroll company is inefficient, several challenges can arise. These challenges include potential data errors resulting from manual entry or file transfers, delays in processing employee contributions and updating retirement plan records, compliance risks due to inaccurate or delayed data exchange, and an increased administrative burden on HR and benefits administrators.
To address these challenges, organizations must prioritize establishing effective payroll integration protocols and fostering open communication channels between their record keeper and payroll provider. This can be achieved by implementing automated data exchange processes, conducting regular reconciliation procedures, and establishing clear communication protocols. By ensuring accurate and timely management of retirement plan data, organizations can mitigate compliance risks, streamline administrative processes, and ultimately enhance the retirement savings experience for employees.
During The Plan Sponsor University (TPSU) Fiduciary Education Program at UCLA, Fred Barstein, CEO of TPSU and 401kTV chatted with Carlos Orellana, a human resources director with 96 employees at his organization. They discuss the importance of payroll integration and the challenges faced when the record keeper and payroll company do not communicate effectively. Carlos highlights the inefficiency and Wishlist for seamless communication between payroll and the record keeper. Fred emphasizes the criticality of this integration, especially for auto features, and encourages pushing record keepers to implement it.
Read the Full Transcript Here:
Fred Barstein:
Greetings. This is Fred Barstein, CEO and founder of TPSU. I am here on the beautiful campus of UCLA, where we just completed a TPSU program, and I’m here with Carlos. Welcome, Carlos.
Carlos Orellana:
Thank you. Thanks for having me.
Fred Barstein:
Okay if we ask you a few questions?
Carlos Orellana:
Absolutely.
Fred Barstein:
Okay. Before we start, tell us your first name, number of employees, and your role at your organization.
Carlos Orellana:
First name, Carlos Orellana. I’m a human resources director, and number of employees is 96 at the organization.
Fred Barstein:
Very good. So one of the things you mentioned, which we talk about a lot and emphasize, is the importance of payroll integration, which is the record keeper and the payroll company talking to each other. Tell us about the issues when that doesn’t happen.
Carlos Orellana:
Right. Great question. So the issue is, as an HR director, I am in charge of processing payroll, and we spend a lot of time and energy focusing on payroll, 401k payroll, and it would be nice if payroll could communicate-
Fred Barstein:
To the record keeper.
Carlos Orellana:
… with the record keeper very efficiently. So that is on my wishlist.
Fred Barstein:
Right. And also, the other way too, the record keeper communicate to the payroll.
Carlos Orellana:
Correct.
Fred Barstein:
Right. So what have you tried to do to get them to communicate. Have they resisted, or you just have to get it done?
Carlos Orellana:
They haven’t, unfortunately, the payroll, I mean, the record keeper company right now does not have the ability to communicate with our payroll provider.
Fred Barstein:
Yeah. Yeah. That’s important to do it. And most record keepers can, so it is important to push them to do that on it. Well, thank you. That’s a really, really critical point that we talk about, especially with the auto plan and all the auto features. It relies on payroll integration to do that.
Carlos Orellana:
Right.
Fred Barstein:
Final question, a couple of things you learned today, and would you recommend TPSU to others?
Carlos Orellana:
It’s great being here. Thanks for inviting me. I learned a lot. I learned about Secure 2.0, about part-time employees, that they need to work 500 hours, and then we’re going to implement that in the near future. We’re going to make them eligible in the near future. Also learned about my responsibilities as a fiduciary, and then also as to how to form a committee so we can make the right decisions for our plan.
Fred Barstein:
Well, that’s all the time we have. Thank you, Carlos, for your time.
Thank you for watching 401kTV. Stay tuned.
