Change of entry point

[Guest Looser]

Our current 401(k) document has quarterly entry points. We are considering going to monthly entry points. Has anyone else done this? Glad you did or whish you hadn’t? If anyone has any thoughts, I would love to hear them. Thanks!

[Erik Read]

Check with your provider - they may charge you extra for more frequent entry - the administration increases - PIN letters go from a quarterly event to a monthly event.

The biggest issue that I see, is that with Monthly entry, the determination falls back to the the employer on the entry date rather than the TPA. This is alright as long as the HR individual has an understanding of the entry dates and how to calculate eligiblity.

[Guest POMY]

I found that the administrative burden was easier when the plan made deduction percentage changes "as soon as administratively possible". Participants made less changes and were happier about being able to adjust their account more frequently.

Payroll keyed the deduction percentages in, so they did not have a stack of papers waiting to be keyed in a short deadline. And you don't have to respond to all of the late paperwork requests-which takes some time.

In the systems I have worked on where the recordkeeper recorded the changed deduction percentages, they were able to send them to our payroll at what ever frequency we wanted. But, as ERead's advice was good--check with your recordkeeper on the cost.