401(k) Plan Administrator Requirements

A 401(k) plan administrator makes sure that your retirement savings program is compliant with all rules and regulations, and that its investment strategies are working successfully to help all participants save money to retire.

  • Understanding what a plan administrator does can help sponsors decide whether they want to take on these responsibilities in-house or outsource to a third-party administrator
  • Ubiquity Retirement + Savings has specialized in affordable, flat-fee plans for over 2 decades
  • Partner with Ubiquity to help ease the burden of your 401(k) responsibilities
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A 401(k) plan administrator ensures that retirement plans benefit both employers and employees while complying with IRS and DOL laws. Administrators are necessary for handling paperwork, performing annual testing, and monitoring plan operations.

Plan administration fees can add to the expense of offering 401(k) retirement savings benefits to employees, but the cost can also be shared by plan participants.

Ubiquity is a 401(k) plan administrator that specializes in small business clients. By charging only a flat monthly fee, rather than AUM fees and per-participant charges, we help retirement plan sponsors keep costs down without sacrificing valuable services.

Required 401(k) Plan Administrator Services

Businesses require a 401(k) plan administrator to:

  • Help design the plan and ensure that it is administered in accordance with plan documents.
  • Execute day-to-day activities like participant enrollment, loan requests, and distributions.
  • Serve as the plan recordkeeper, making note of eligibility changes and plan amendments.
  • Monitor the plan for legal and tax compliance, fixing problems proactively and as they arise.
  • Prepare Form 5500 for the IRS and 1099-R for participants, as well as employee censuses.
  • Audit and performs nondiscrimination testing, as required by the IRS for most 401(k) plans.
  • Obtain necessary fidelity bonding, acting as a fiduciary.
  • Consult with the employer during company mergers, bankruptcies, and other events.

What Are Sponsors Required to Pay Their 401(k) Plan Administrators?

Regulatory changes requiring more transparent fee disclosure have made it easier for plan sponsors and participants to see exactly what they are paying for their administrative services.

The best 401(k) plan administrators charge a flat monthly or annual fee. Ubiquity has operated under this low-cost model since 1999. Other administrators may charge based on a percentage of the total Assets Under Management, per-participant fees, and transactional fees for each distribution processed or loan administered.

Employers may write a check out each month, quarter, or year. Employees covering some or all of the cost of administration may see periodic deductions from their accounts in a flat fee. If they are paying AUM fees, it can be more difficult to see the full amount charged. These hidden fees could show up as a line-item or baked into investment expenses as part of a mutual fund’s expense ratio.

How to Choose a 401(k) Plan Administrator

Fees are one of the considerations for choosing a 401(k) plan administrator. Ideally, a plan administration service provider will maintain robust internal controls by following set procedures that protect security and information privacy, draw up financial reports that are accurate and free from errors, and prevent fraud. All of this information should be spelled out in a Service Organization Control report, or SOC report.

How to Change a 401(k) Plan Administrator

A sponsor is not required to keep the same plan administrator over the lifetime of the 401(k) plan. Annual reviews should be conducted to ensure the plan administrator is providing the best possible service at the lowest possible cost. Switching providers is generally not difficult for the sponsor. There may be a short period of blackout time during the transition, where changes cannot be made to the plan. The transfer can occur in a few days or a few months, depending on the cooperativeness of the old plan custodian.

Contact Ubiquity to learn more about 401(k) plan administration that suits the needs of small businesses.

Ready to get started?

If you are a small business owner and need a retirement plan for yourself and your company, only Ubiquity offers flat-fee plans, plus expert guidance along the way.

We will fully customize your plan to meet the specific needs of your small business.

All the service, without all the fees!

Looking to offer your employees the best benefits plan in a way that fits your budge? Ubiquity is happy to provide all the 401(k) information you’ll need to make an informed choice about which provider is right for you. Reach out to learn more about our 401(k) plans starting as low as $97/month.

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© 2023 Ubiquity Retirement + Savings
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Do not sell my info
44 Montgomery Street, Suite 300
San Francisco, CA 94104
Support: 855.401.4357

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© 2023 Ubiquity Retirement + Savings
Privacy Policy
Do not sell my info
44 Montgomery Street, Suite 300
San Francisco, CA 94104
Support: 855.401.4357

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