The primary purpose of a 401(k) plan record-keeper is to keep track of the plan money. Record-keepers are also responsible for maintaining the accounting of plan contributions and what they have earned.
Record-keepers track which incoming dollars are which. All record-keeping function are typically provided online. In addition to tracking individuals’ assets, record-keepers often provide other plan services, which include:
- Maintaining a web portal to check 401(k) balances and make transfers
- Printing and mailing account statements to employees
- Requesting trades and other transactions within participant accounts
- Producing enrollment and education materials
- Review operations to ensure compliance with various laws
- Update processes as regulations change
Choosing a Record-Keeper
In some cases, the company that provides the investment advice will also provide the record-keeping services. However, in other cases, a financial advisory firm will be used to provide the plan participants with investment advice and a plan record-keeping company will be used for the plan record-keeping services. However, over the last several years, most record-keeping functions can be performed online or even via a mobile app.
