401(k) Annual Administration - A Checklist for Business Owners

November 29, 2023

Table Of Contents

Annual 401(k) administration shouldn’t be stressful or time-consuming for employers. A qualified 401(k) provider will do most of the heavy lifting by completing the most technical tasks, making the employer's role simple. I recommend employers use a checklist to ensure their 401(k) plan’s annual administration tasks are completed on time. A basic one will suffice.

Don’t have a 401(k) administration checklist for the 2024 plan year? Use our checklist. It’s broken into three sections:

Deadline Tasks – Summarizes the tasks that must be completed by a specific date
Periodic Tasks – Summarizes the tasks that may need completed throughout the year
Plan Records – Summarizes the records to maintain for documentation purposes

Deadline Tasks

Many 401(k) administration tasks must be completed by a specific date each year. Below are the 2024 deadlines for a calendar-based plan. Enter the date each task is completed in the field to the right of task. Enter “N/A” if not applicable.

4^th Quarter 2023

Deadline

Date Complete

Initials

Distribute any applicable 2024 notices to plan participants. These include:

Safe harbor 401(k) notice
Qualified Default Investment Alternative (QDIA) notice
Automatic (negative) enrollment notice
Participant fee disclosure notice

12/2/23

1st Quarter 2024	Deadline	Date Complete	Initials
Provide 4^th quarter benefit statements to participants (due 45 days after quarter-end)	2/14/24
Distribute contribution refunds to correct a failed 2023 ADP/ACP test to avoid a 10% IRS excise tax (non-safe harbor plans only).	3/15/24
Fund 2023 employer contribution to take 2023 tax deduction (if partnership or S-Corp with no tax filing extension)	3/15/24

2^nd Quarter 2024	Deadline	Date Complete	Initials
Distribute Required Minimum Distributions (RMDs) to participants that became RMD-eligible during 2023.	4/1/24
Fund 2023 employer contribution to take 2023 tax deduction (if sole proprietor or C-Corp with no tax filing extension)	4/15/24
Distribute 2023 elective deferrals in excess of IRC Section 402(g) limit ($22,500 for 2023) to avoid double-taxation.	4/15/24
Provide 1st quarter benefit statements to participants (due 45 days after quarter-end)	5/15/24

3^rd Quarter 2024	Deadline	Date Complete	Initials
Distribute Summary of Material Modification (SMM) or new Summary Plan Description (SPD) to participants if SPD modified during 2023	7/28/24
File 2023 Form 5500 or 2 ½ month extension (Form 5558)	7/31/24
Provide 2^nd quarter benefit statements to participants (due 45 days after quarter-end)	8/14/24
Fund 2023 employer contribution to take 2023 tax deduction (if partnership or S-Corp with tax filing extension)	9/15/24
Distribute 2023 Summary Annual Report (SAR) to participants (if Form 5500 not extended)	9/30/24

4^th Quarter 2024	Deadline	Date Complete	Initials
Fund 2023 employer contribution to take 2023 tax deduction (if sole proprietor or C-Corp with tax filing extension)	10/15/24
File 2023 Form 5500 (if extension filed by 7/31)	10/15/24
Provide 3^rd quarter benefit statements to participants (due 45 days after quarter-end)	11/14/24
Provide any applicable 2025 notices to plan participants. These include: Safe harbor 401(k) plan notice Qualified Default Investment Alternative (QDIA) notice Automatic (negative) enrollment notice Participant fee disclosure notice	12/2/24
Distribute 2023 Summary Annual Report (SAR) to participants (if Form 5500 extended)	12/15/24
Distribute contribution refunds to correct a failed 2023 ADP/ACP test with a 10% excise tax (non-safe harbor plans only).	12/31/24
Make any 2023 safe harbor or QNEC contributions	12/31/24
Execute (sign and date) any 2024 discretionary amendments	12/31/24
Distribute Required Minimum Distributions (RMDs) to participants that became RMD-eligible before 2023.	12/31/24

Periodic Tasks

Below is a list of notable tasks you may need to complete during the 2024 plan year. Enter your initials to the right of each item you have reviewed. Enter “N/A” if not applicable.

Item	Initials
Review plan operation to ensure compliance with plan document. Failure to follow the terms of the plan document is a common problem found during a plan audit
Ensure all eligible employees are given the opportunity to enroll in plan. By supplying EF with information regarding all employees who receive a Form W-2, you may reduce the risk of omitting eligible employees
Ensure each newly eligible employee receives the following items before they are eligible to participate: Forms or website instructions necessary to enroll Beneficiary designation form Summary Plan Description (SPD) Applicable participant notice(s) (safe harbor, automatic enrollment, QDIA) Participant fee disclosure notice
Ensure the plan definition of compensation is being used to calculate participant deferrals and employer contribution allocations. If plan specifies a different definition of compensation for a particular contribution type, be sure that different definition is being correctly applied
If the plan allows participant loans, ensure all loans are repaid according to the terms of the plan’s loan policy and each loan’s promissory note.
Ensure employee salary deferrals and loan payments are deposited timely. Employers must deposit deferrals as soon as they can be segregated from employer assets. Most employers deposit salary deferrals when making payroll tax deposits
Periodically complete plan “housekeeping” (recommended quarterly), including: Cash-out small account balances related to terminated participants Process any defaulted loans Use any unallocated forfeitures
Limit 401(k) deferrals to IRC 402(g) limit ($23,000 for 2024). Pre-tax and Roth 401(k) deferrals (if applicable) are combined for purposes of the IRC 402(g) limit

Plan Records

Due to ERISA document retention rules, you must retain detailed 401(k) records - including testing results, transactions and employee activity - for at least 6 years. Compliance with these rules is important because missing records can make it more difficult to answer questions about plan operations – which can increase your liability unnecessarily.

Below is a list of items you should retain related to the 2024 plan year. Enter your initials to the right of each item you have reviewed for sufficiency. Enter “N/A” if not applicable.

Item	Initials
Annual Valuation – Contains the participant-level transactions for the plan year, including contribution, distribution and fee activity. If received quarterly, file all four quarters.
Annual Trustee/Custodian report – Contains the trust-level transactions for the plan year, including all purchases and sales that occurred in trust. If received quarterly, file all four quarters.
Annual Nondiscrimination Testing – 401(k) plans have various testing requirements. Most common tests include: Coverage (IRC Section 410(b)) testing Actual Deferral Percentage (ADP) and Actual Contribution Percentage (ACP) testing (non-safe harbor 401(k) plans only) Excess Deferral (IRC Section 402(g)) testing Annual Addition (IRC Section 415(c)) testing Top Heavy (IRC Section 416) testing Rate Group (IRC Section 401(a)(4)) testing (“new comparability” plans only)
Annual Participant Notices – Any notices provided to participants, including (as applicable): Participant fee disclosure (ERISA 404a-5) notice Safe harbor 401(k) plan notice Qualified Default Investment Alternative (QDIA) notice Automatic (negative) enrollment notice
Form 5500 – Copy of Form 5500 with related schedules as filed with Department of Labor (DOL)
Independent Audit Report – If required to be filed with Form 5500
Summary Annual Report – Summary of Form 5500 provided to participants

Feel confident, not overwhelmed!

There is no reason to feel overwhelmed by your 401(k) plan’s annual administration responsibilities. With the help of a qualified 401(k) provider, they are easy to understand and manage using a checklist. Don’t feel that way? I have a simple solution – replace your 401(k) provider!