Payroll and 401k Administration – Important Components of 401k Process Puzzle.
If payroll and 401k administration are not functioning seamlessly, it is likely that someone is spending too much time on a function that can and should be automated. At the conclusion of a 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 payroll and 401k administration as well as the interface. She realized she had inherited a manual process between Payroll and 401k deferrals. She knew there was an opportunity to improve the 401k. Improved 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 a result of this TPSU Program, the firm will also be looking at improved practices around 401k education for employees.
Full Transcript Here
Greetings. This is Fred Barstein. We’ve just completed a TPSU program at UC Berkley and I’m here with Debbie…
Right.
…who is a repeat offender with us. Been to our program before. Debbie, okay if we ask you a few questions?
Yes.
Okay, great. Before we do, just tell us a little bit about yourself and the size of your organization and your role there.
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.
Are you a not for profit?
Yes, we are non-profit. Correct.
And so in the program today, you talked about moving from manual to automated processing. What did you automate actually?
So when I started at the organization initially, it was a manual process completely. Doing the upload of the …
Payroll.
… Payroll information regarding 401k deferrals.
Yes.
That was all done manually by our financial manager. It was very cumbersome.
Yes.
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.
Right.
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.
Right.
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.
Right.
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.
Right. And did it take a long time to get that going?
It was probably about a couple of months.
Right.
Just staying on it and trying to iron out the wrinkles, but yeah.
And you had to rely upon and make sure the record keeper and the payroll vendor talked to each other?
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.
Okay.
So really, that’s not that many, you know, that it took.
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.
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.
Yeah.
So it really made an impression on me today, that doing it even monthly or at least quarterly …
Right.
… Could be super beneficial to us.
One piece of advice, bring pizza.
That’s right. We know in our organization, food talks.
[crosstalk 00:03:36]. Or a food truck could be better.
Yeah.
Great. Well, thanks for your time today. Thanks for attending again, and thank you for watching 401kTV.
