What Are a 401(k) Plan Administrator’s Responsibilities? 

Planning to offer an employer-sponsored 401(k) plan? Your chosen plan administrator will ensure that your retirement benefits are running smoothly. Plan administrators’ tasks are varied, and we’re breaking down those duties to give you more insight into how company 401(k) plans are managed.  

What is a 401(k) plan administrator?

Before we explore the responsibilities of a plan administrator, let’s backtrack a bit and define what it means to be a 401(k) plan administrator. A 401(k) plan administrator manages the plan and ensures that it complies with IRS and DOL laws. In many cases, a company will hire a plan administrator from a third-party provider to manage the details of their company-sponsored 401(k) plan.  

If you work with a plan provider such as ePlan Services, your plan administrator can enjoy the plan admin dashboard, which brings the plan features right to their fingertips. ePlan Services offers tools such as trackable tasks, an employee onboarding checklist, pre-filled Form 5500s, and more.  

What are the duties of a 401(k) plan administrator?

A plan administrator is responsible for administrative and fiduciary tasks. This means the plan administrator must act in the best interest of all plan participants.  

Some of the administrative tasks that plan administrators are responsible for include but are not limited to:  

• Keeping track of vesting schedules and eligibility 
• Completing annual compliance testing 
• Delivering notices and benefit statements 
• Processing transactions such as: 
  • Loan payments  
  • Salary deferrals  
  • Selected investment changes 
  • Withdrawal requests 

Plan administrators who also take on fiduciary responsibilities may be required to perform tasks such as:  

• Preparing and signing the Form 5500  
• Coordinating audits  
• Maintaining plan security 
• Securing fidelity bonds  
• Approving 401(k) hardship withdrawals 
• Approving plan distributions  
• Confirming that the plan is operated in accordance with DOL and IRS rules

A company that has hired a third party to manage the company-sponsored 401(k) retirement plan must have a firm understanding of what fiduciary responsibilities the plan administrator will perform. Additionally, the company should check the agreement for any limitations and additional fees for performing supplementary tasks.  

Stay informed about plan administrator duties

Knowing exactly what plan administrators do can help business owners make an informed decision about who should be tasked with monitoring their 401(k) plan. Plan participants will also better understand how their plan is set up and who they should contact for help. With ePlan Services, you’ll get education 401(k) management, and an easy setup process, so you can have peace of mind knowing that your company-sponsored 401(k) plan is in good hands.