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401(k) plans are popular today because they offer generous tax benefits to employers and employees. However, to qualify for these benefits, 401(k) plans must complete a myriad of plan administration tasks each year. It’s ultimately up to employers to ensure each task is completed timely. Meeting this important fiduciary responsibility can seem overwhelming, but it doesn’t need to be. The key is hiring a 401(k) provider that’s willing and able to do three things - 1) summarize all required tasks, 2) complete the more difficult and time-consuming ones, and 3) provide straightforward guidance for the rest.
Annual 401(k) administration tasks generally fall into one of four categories – nondiscrimination testing, Form 5500 reporting, participant disclosure, and plan document maintenance. If you’re an employer, I recommend managing the completion of these tasks using a checklist.
A checklist can serve another important purpose - monitoring your 401(k) provider’s job performance. As a 401(k) fiduciary, you can’t simply assume your 401(k) provider is doing their job. You must “monitor” them - to ensure they’re doing a competent and timely job. A checklist can make monitoring easy.
Don’t have a 401(k) administration checklist for the 2022 plan year? Use our checklist. It’s broken into 3 sections:
- Deadline Tasks – Summarizes the tasks that must be completed by a specific deadline
- Periodic Tasks – Summarizes the tasks that may need to be completed during the year
- Plan Records – Summarizes the plan year records to keep for documentation purposes
Deadline Tasks
Many 401(k) administration tasks must be completed by a certain date each year. Below are 2022 deadlines for calendar-based plans. Enter the date each task is completed in the field to the right of the task. Enter “N/A” if not applicable.
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4th Quarter 2021 |
Deadline |
Date Complete |
Initials |
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Distribute any applicable 2022 notices to plan participants. These include:
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1st Quarter 2022 |
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Provide 4th quarter benefit statements to participants (due 45 days after quarter-end) |
2/14/22 |
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Distribute contribution refunds to correct a failed 2021 ADP/ACP test to avoid a 10% IRS excise tax (non-safe harbor plans only). |
3/15/22 |
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Fund 2021 employer contribution to take 2021 tax deduction (if partnership or S-Corp with no tax filing extension) |
3/15/22 |
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2nd Quarter 2022 |
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Distribute Required Minimum Distributions (RMDs) to participants that became RMD-eligible during 2021. |
4/1/22 |
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Fund 2021 employer contribution to take 2021 tax deduction (if sole proprietor or C-Corp with no tax filing extension) |
4/15/22 |
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Distribute 2021 elective deferrals in excess of IRC Section 402(g) limit ($19,500 for 2021) to avoid double-taxation. |
4/15/22 |
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Provide 1st quarter benefit statements to participants (due 45 days after quarter-end) |
5/15/22 |
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3rd Quarter 2022 |
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File 2021 Form 5500 or 2 ½ month extension (Form 5558) |
8/1/22 |
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Provide 2nd quarter benefit statements to participants (due 45 days after quarter-end) |
8/14/22 |
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Fund 2021 employer contribution to take 2021 tax deduction (if partnership or S-Corp with tax filing extension) |
9/15/22 |
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Distribute Summary of Material Modification (SMM) or new Summary Plan Description (SPD) to participants if SPD is modified during 2021. |
9/30/22 |
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Distribute 2021 Summary Annual Report (SAR) to participants (if Form 5500 not extended) |
9/30/22 |
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4th Quarter 2022 |
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Fund 2021 employer contribution to take 2021 tax deduction (if sole proprietor or C-Corp with tax filing extension) |
10/15/22 |
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File 2021 Form 5500 (if extension filed by 7/31) |
10/15/22 |
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Provide 3rd quarter benefit statements to participants (due 45 days after quarter-end) |
11/14/22 |
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Provide any applicable 2023 notices to plan participants. These include: |
12/2/22 |
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Distribute 2021 Summary Annual Report (SAR) to participants (if Form 5500 extended) |
12/15/22 |
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Distribute contribution refunds to correct a failed 2021 ADP/ACP test with a 10% excise tax (non-safe harbor plans only). |
12/31/22 |
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Make any 2021 safe harbor or QNEC contributions |
12/31/22 |
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Execute (sign and date) any 2022 discretionary amendments |
12/31/22 |
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Distribute Required Minimum Distributions (RMDs) to participants that became RMD-eligible before 2021. |
12/31/22 |
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Periodic Tasks
Below is a list of notable tasks you may need to complete during the 2022 plan year. Enter your initials to the right of each item you have reviewed. Enter “N/A” if not applicable.
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Item |
Initials |
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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. |
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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. |
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Ensure each newly eligible employee receives the following items before they are eligible to participate:
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Ensure plan definition of compensation is being used to calculate participant deferrals and employer contribution allocations. If the plan specifies a different definition of compensation for a particular contribution type, be sure that a different definition is being correctly applied. |
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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. |
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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. |
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Periodically complete plan “housekeeping” (recommended quarterly), including:
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Limit 401(k) deferrals to IRC 402(g) limit ($20,500 for 2022). Pre-tax and Roth 401(k) deferrals (if applicable) are combined for purposes of the IRC 402(g) limit. |
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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 2022 plan year. Enter your initials to the right of each item you have reviewed for sufficiency. Enter “N/A” if not applicable.
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Item |
Initials |
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Annual Valuation – Contains the participant-level transactions for the plan year, including contribution, distribution, and fee activity. If received quarterly, file all four quarters. |
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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. |
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Annual Nondiscrimination Testing – 401(k) plans have various testing requirements. Most common tests include:
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Annual Participant Notices – Any notices provided to participants, including (as applicable):
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Form 5500 – Copy of Form 5500 with related schedules as filed with Department of Labor (DOL) |
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Independent Audit Report – If required to be filed with Form 5500 |
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Summary Annual Report – Summary of Form 5500 provided to participants |
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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!
