LAST REVIEWED Oct 21 2020 9 MIN READ
By The Human Interest Team
New updates will ease the administration of your 401(k) plan and help your employees save for retirement.
Now, we have an exciting change to share with you, and it’s actually pretty revolutionary in the retirement benefits industry. We have developed our own proprietary recordkeeping and administrative platform so we can give you faster response times and enhanced customer service.
What’s a recordkeeper?
A Recordkeeper is an essential aspect of a 401(k) plan; their role is to help keep track of your money. A Recordkeeper is responsible for tracking contributions, earnings, and investments at the participant-level and directing the Custodian to execute trades requested by plan participants. This is essentially the bookkeeping function of the plan, where all the figures stay up to date.
Who has been my plan’s recordkeeper so far?
Like many 401(k) providers, Human Interest has relied on outsourcing some recordkeeping and administrative functions to a trusted third party, LT. If you’re reading these FAQs, it is likely that your plan is currently on the LT platform. LT has been a great partner and we will always appreciate the role they played in our early years.
Why will Human Interest be my recordkeeper now?
It’s always been our plan to develop our own recordkeeping infrastructure at Human Interest so that we could improve our response times and give you a better experience.
Over the past year, we’ve finalized the details of our proprietary recordkeeper services. In fact, we are already serving more than 500 plans on this platform. We’re now ready to transition more plans to our recordkeeping platform, including yours!
How will this transition to Human Interest’s recordkeeping services help me?
We are excited about this change and the anticipated benefits you will experience, including:
Added ease of administration
Faster, more accurate contribution processing
Reduced total payroll processing times
More streamlined customer service with in-house recordkeeping and administration
What do I need to do?
There are three steps you need to take to transition your plan to our recordkeeping platform:
Designate a trustee of your plan
Sign the LT Trust Agreement Termination Letter
Sign updated contracts (you will receive two additional emails via DocuSign to complete the following):
Sign the Matrix Custody Agreement – this will create a new trust account with your current custodian, Matrix, and remove any relationship with LT Trust.
Sign the Updated Human Interest Services Agreement – this updated service agreement includes the services Human Interest will be providing that were outsourced to LT Trust in the past.
Sign your amended Adoption Agreement listing the new plan trustee.
We will send these documents to you in a series of three emails sent from [email protected].
What do participants need to do?
Nothing. No action is required from plan participants. Their account will be moved over and we will notify them inside their Human Interest account about this transition.
What is the timeframe for the transition?
We will work to schedule the transition within the next month or two. The total time for the transition of records will take up to 15 business days.
What will this change cost? Is there a change in fees?
Nothing. This change will not increase plan fees for you or your employees. The fees that used to by paid to LT Trust will now be paid to Human Interest.
How will this affect my plan?
In order to ensure that all of your plan details are properly transitioned to Human Interest’s recordkeeping system, there will be a 15-day blackout period on plan changes, including amendments and contribution processing.
We’ll give you advance notice (of 30+ days) of the blackout period for your plan.
Participants and beneficiaries of individual account plans affected by such blackout periods must be notified. Human Interest will handle notifications for your participants.
Contributions will be processed after the blackout period is complete.
Amendments are not allowed during the transition period. Sponsors can request an amendment; but the effective date will have to be post-blackout period.
What is a 401(k) trustee?
When a plan sponsor establishes a new retirement plan, a trustee is designated to ensure the plan is being run in accordance with the plan document and following ERISA and DOL rules. The Trustee has exclusive authority and discretion to manage and control plan assets.
We will send you a “Guide to Trustee Responsibilities” that provides detailed information regarding trustee and fiduciary responsibilities. You can also find a copy of the Guide here.
Who is my trustee now?
The current trustee of your plan is LT Trust, acting as a directed trustee. They have been responsible for following the investment directions given to them by the plan sponsor, investment manager or plan participants. Going forward, your plan will be set up with an individual that will be a discretionary trustee. The paperwork we send you will outline how to designate a new trustee of the plan.
Who can be my trustee?
The trustee can be the owner or an executive of your company – someone who will oversee the administration of the 401(k) plan. Human Interest will help with some of the trustee duties, however, we’ll need you or a member of your company to be listed as the trustee.
Our legal counsel advised that Human Interest Advisors should not serve as both the Trustee and RIA (Registered Investment Advisor) due to SEC custody regulations, per SEC rule 206(4)-2(a)(3). To solve for this, the Plan Sponsor can serve as Trustee, and Human Interest Advisors remains the RIA. As such, we have structured our modified agreement, so that the Plan Sponsor serves as Trustee and still delegates a great deal of trust-administrative authority to Human Interest.
What are a trustee’s duties?
Please refer to the “Guide to Trustee Responsibilities” that provides detailed information regarding trustee and fiduciary responsibilities.
The trustee usually has exclusive authority and discretion over the management of the plan. As your TPA and Recordkeeper, Human Interest will assist the trustee with day-to-day duties to ensure the plan is compliant with ERISA guidelines.
The trustee is responsible for keeping their payroll system updated with current employee data. Human Interest will review the data and determine when a participant becomes eligible to participate in the plan and even when a participant has met their 402(g) limit. If we notice the data is inaccurate, we will reach out to you and take the next steps to ensure the data reflected is accurate.
Have another question?
Email us at [email protected]
The Human Interest Team
We believe that everyone deserves access to a secure financial future, which is why we make it easy to provide a 401(k) to your employees. Human Interest offers a low-cost 401(k) with automated administration, built-in investment advising, and integration with leading payroll providers.