If you’re transitioning an existing 401(k) plan that includes automatic enrollment over to Guideline from another provider, there are specific processes you’ll need to follow to ensure your plan is converted properly.
Here are several FAQs to help you understand conversion plans with automatic enrollment and assist you with the process.
What is a conversion 401(k) plan?
A conversion plan refers to Guideline clients that have an existing 401(k) plan with a different service provider and are transferring their plan to Guideline as their new service provider.
What is a plan participant census and why do I need to share it with Guideline?
A census provides us with each of your participants’ personal and 401(k) information, so we can complete important plan-related tasks, such as properly importing their data, sending participants required notices, and filing your plan’s Form 5500.
Each plan can be set up a little bit differently, and we need to know your prior plan’s details to ensure a smooth transition and to avoid any compliance issues. For plans with automatic enrollment this includes information about each participant's current and prior elections as well as any default elections.
To assist, we’ve provided directions below on where you can find your prior plan’s details and how to fill out the census for Guideline.
Where can I find my prior plan’s details?
In order to start your plan with Guideline, you must work with your prior 401(k) provider to obtain the census information. Please note, Guideline does not have access to this data and cannot provide it.
Depending on your provider, this information may be available on your plan sponsor dashboard, the contribution or deferral report, or even through your payroll provider. If you have questions on where to find this information, we recommend reaching out directly to the provider’s customer support team.
What are the steps to fill out the participant census?
Personal and demographic info
Please fill out the personal and demographic information for all eligible and terminated employees with 401(k) account balances.
Wage type
What it is: Shares the type of wages an employee or owner receives. W2 means the employee receives a salary, whereas self-employed income (SEI) applies to those who report earnings on a K1 or Schedule C and are not part of an S-Corporation.
How to fill out the census: Enter W-2 or SEI
Pre-tax deferral
What it is: The participant’s current pre-tax employee contribution amount.
How to fill out the census: Enter a percentage or a dollar amount and include units % or $ for each participant so deferrals can be set correctly. All participants that are auto-enrolled under a QACA plan must have a value of at least 3% for this column. For self-employed individuals, elections must be set to 0; they can set up owner’s draws within their dashboards.
Roth deferral
What it is: The participant’s current Roth employee contribution amount; self-elected only.
How to fill out the census: Enter a percentage or a dollar amount and include units % or $ for each participant so deferrals can be set correctly. Only participants marked as self-elected should have Roth deferrals.
Election type
What it is: Shares how a participant is currently enrolled in the plan. Self-elected (SE) means the participant manually enrolled and sets their own deferral rate (also known as an affirmative election). Auto-enrolled (AE) is when an employee is automatically contributing due to auto-enrollment. Employees who are not yet eligible to participate are not eligible (NE).
How to fill out the census: Enter SE, AE, or NE.
First year of auto-escalation (only if plan has auto-escalation)
What it is: With automatic escalation, participants who have been automatically enrolled (and have not elected their own deferral rate) will have their deferral rates increased on an annual basis until a certain percentage has been reached. While certain plans are required to have automatic escalation, it is not a universal requirement. If your plan has automatic escalation you must complete this section.
How to fill out the census: Required only if your plan has automatic escalation for auto-enrolled participants. Provide the first plan year that the participant deferral rate was/will be automatically increased. If the participant has not been automatically increased yet, this can be a future date.
What if my prior provider doesn’t have this information?
All providers must keep accurate and complete participant data. Your third-party administrator or recordkeeper should have this information.
If you don’t have a participant’s contact information, try reaching them using any available information you have, like emergency contact info or social media accounts. If you still can’t contact a participant, a professional search service can help you find them.