Recordkeeping transition FAQs

9 MIN READEditorial Policy

We’ve made big enhancements to the Human Interest platform, which will make it easier to administer your plan. 

What’s changing?

Recordkeeping for your plan is currently outsourced to a third party named LT Trust. We are ending our service agreement with LT and moving all plans to the Human Interest recordkeeping system. This will mean streamlined operational processing because we won’t have to go through a third party.

What is recordkeeping?

Recordkeeping is an essential aspect of 401(k) and 403(b) plans. 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) and 403(b) providers, Human Interest has relied on outsourcing some recordkeeping and administrative functions to a trusted third party, LT. If you’re reading this FAQ, it is likely that your plan is currently on the LT recordkeeping system. LT has been a great partner and we will always appreciate the role they played in our early years.

Why am I transitioning to the Human Interest recordkeeping system 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. We’ve made big enhancements to the Human Interest platform and are now serving the vast majority of our customers on our own recordkeeping system. There are a few plans that remain on LT’s system and we will be transitioning them over as quickly as possible.

How will this transition help me?

Human Interest recordkeeping services are deeply integrated within our platform, which will mean streamlined operational processing because we won’t have to go through a third party.

We anticipate many benefits including: 

  • Faster contribution processing

  • Reduced total payroll processing times

  • Streamlined customer service

What do I need to do? 

In order to transition your plan, we will need you to sign up to three documents, including:

  • LT Termination Notice - This document will notify LT that you will no longer be using their recordkeeping service.

  • Trust Agreement - As part of this transition, 401(k) plans will need to name a Trustee.This is not a requirement for 403(b) plans.

  • Matrix Custodial Agreement - Assets on the Human Interest recordkeeping system are held with Matrix Trust Company, so you will need to sign an agreement with Matrix to act as your plan’s custodian.

What is a 401(k) Trustee?

A Trustee is designated by a Plan Sponsor to ensure the plan is being run in accordance with the plan document and following ERISA (Employee Retirement Income Security Act) and DOL (U.S. Department of Labor) rules. 

As a Trust Company, LT Trust was previously acting as a Directed Trustee for the plans on their recordkeeping system. With the move to the Human Interest recordkeeping system, plans will need to name an individual 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.

See the Guide to Trustee Responsibilities for more information regarding trustee and fiduciary responsibilities. 

What do my employees need to do?

No action is required from your employees. Their accounts will be transitioned automatically. We will provide a notice inside their Human Interest account about this transition.

Is there a change in fees?

There is no change in fees for you or your employees. 

What is the timeframe for the transition?

The transition will take 2-3 weeks to complete. Once we receive your signed documents, we will schedule the transition within the next few weeks. 

How will the transition impact my plan?

In order to ensure that your plan is properly transitioned to Human Interest’s recordkeeping system, there will be a 21-day blackout period.

Blackout periods are normal, temporary, and allow time for important administrative tasks to take place on your account. A blackout period may affect certain functions for participants in the plan, including (but not limited to): 

  • Making investment changes

  • Changing your contribution rate

  • Making unscheduled loan payments

  • Requesting withdrawals, distributions, or loans

As required by federal law, participants in the plan are sent a notice regarding the upcoming blackout period as soon as possible (at least 30 days in advance) in order to provide sufficient time to consider the effect of the blackout period on their retirement and financial plans.

Contributions made during the blackout period will be collected from your employees’ pay as usual, and deposited into your plan as soon as the blackout is lifted.

You can request an amendment to your plan during the blackout period, but you have to choose an effective date that is after the blackout period is over. 

Additionally, there will be a change in custodian that holds your plan assets.

What does the change in custodian mean for my plan?

Every recordkeeper works with a custodian that holds plan assets and executes trades requested by plan participants. LT uses Mid Atlantic Trust Company. Human Interest uses Matrix Trust Company. 

As part of this transition, we will be moving your plan’s assets from Mid Atlantic to Matrix. 

Your plan assets will be transferred between custodians as cash and re-invested based on participant investment elections. This transfer will happen during the blackout period. Funds will be out of the market for no more than five days. All transactions associated with the transfer will be displayed in as a “Custodian Transfer” in the participants’ activity feed in their Human Interest dashboard.

A small number of participants have a portfolio that differs from their current investment elections. This could happen if a participant changes their investment elections for future allocations only (i.e. preserving any previously allocated investments). When the participant's cash is re-invested after the transfer, it will be allocated based on their investment elections. For example, if prior to the custodian transfer a participant’s portfolio is allocated to funds A, B, C, D, E, and F, but their investment elections are set to invest contributions only into funds D, E, and F, their portfolio mix will change due to the transfer. After the transfer, the participant's entire account will be invested in D, E, and F. No funds will be invested in A, B, or C.

If your team would like help updating their portfolio to the prior allocation after the transfer is complete, they can email us at [email protected] and we will walk them through the steps.

Have another question?

Email us at [email protected]

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 education, and integration with leading payroll providers.

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The content in this blog post has been prepared for informational purposes only, and is not intended to provide, and should not be relied on for, tax, legal or accounting advice. You should consult your own tax, legal and accounting advisors before engaging in any transaction. Human Interest's investment advisory services are provided by Human Interest Advisors, LLC, an SEC-Registered Investment Adviser. Investing involves risk and may result in loss. Past performance is no guarantee of future results, and expected returns may not reflect actual future performance.