Mary Beth’s Corner

Overwhelmed By Payroll Processing?

Administration, New Mandates, Participant Services
July 19, 2023

Did you know Plan Sponsors spend on average 40-60 hours, or over one week annually, submitting and updating payroll files?

Manual data entry using spreadsheets or other rudimentary tools has been known to be one of the most strenuous problems for business owners. This method of payroll processing takes time and is prone to error.

When you’re running a business, time is a precious resource and running an accurate payroll can be time consuming and complex.

According to a recent survey by HR Trends, the top five payroll processing challenges small businesses face are:

Keeping up with federal, state and local compliance recordkeeping (59%)
Manual data processing (55%)
Payroll tax compliance (51%)
Data security and payroll fraud prevention (35%)
Paying independent contractors and gig workers (30%)

What Does This Have to Do with A Retirement Plan?

As companies grow, the level of complexity and vulnerability connected to manual data entry increases, leaving Plan Sponsors no guarantee of protected personal information, avoidance of calculation errors or satisfaction of new mandates. Fortunately, now more than ever, there are payroll solutions that offer 180⁰ or even 360⁰ integration that is available between many payroll providers and retirement plan recordkeepers.

Payroll Integrations and aggregators can automate a plans payroll experience between the Plan Sponsor, Recordkeeper and TPA, creating a seamless and accurate payroll submission experience.

With this automation your payroll can now:

Calculate & track eligibility
Manage deferral percentages & updates
Accurately track Long-Term Part-Time Employees
Ease plan loan, distribution & hardship withdrawal processing
Promote participant education campaigns
Efficiently produce mid-year & year-end census data

Automated But Not Automagical

Even with all the automation that is offered between payroll providers and recordkeepers, there is still work to be done by the Plan Sponsor to maximize the effectiveness of these services. For instance, accurate payroll records must be managed and maintained by the Plan Sponsor. Periodic review of submitted data is necessary to ensure that timely and accurate results are being produced.

Solutions to Payroll Pains

A Plan Sponsor’s time is already stretched thin and with constant legislative changes, it can be difficult to keep up with accurate payroll processing and new retirement plan mandates. Yet, one wrong move and a small business could be facing noncompliance penalties, fines, and unhappy employees – but that doesn’t have to be the case.

At My Benefits we strive to be a driving force for innovation within our industry by leveraging our expertise and navigating new regulations for tailored, proactive and accurate retirement plan solutions.

Let’s have a conversation today to discuss how payroll integration can help provide you or your Plan Sponsor(s) with a more ideal client experience.