As an administrator, you can find a list of all employees (including terminated employees) and their participation status for your 401(k) plan in the Roster tab of your administrator dashboard. The roster must remain complete and accurate for record-keeping and reporting purposes. If you believe you need to remove an employee from your roster, you'll want to confirm it is the right action before moving forward.
When it's allowable to remove participants from your roster
Removing a participant from your roster should only be completed in certain scenarios. The list below provides common reasons to request an employee removal:
An employee was hired and added to your roster, but they never showed up to work and never received any wages
A contractor or any non-W2 employee was inadvertently added to your roster
Placeholder accounts like “test account” were added
Duplicate accounts exist for one employee
An owner who has not actively been involved in the day-to-day management of the company and has not earned income (either via W2 wages or self-employment income) from the company was added to the roster
To remove employees from your Guideline roster, please email email@example.com to request removal (even if you have already removed the employee from your payroll roster).
Please note that both current and former employees and owners who are earning W2 wages must remain on your roster. If you are an owner, you may also need to be included on the roster if you are earning income from the company.
Why terminated employees should remain on your roster
Guideline requires the information for all employees that were previously employed and have since been dismissed generally dating back to 6 years prior to the plan start date or any former employee who participated in the 401(k) plan.
Dismissed employee information is used to maintain a complete and accurate record of who was eligible to participate in the plan and to provide important information about the benefits under the plan to certain dismissed employees who may be entitled to this information.
Having complete and accurate records also helps us ensure we can assist with responding to a request by the IRS or DOL. In the event of a claim by the dismissed employee or an audit of your plan, we may be required to share records dating back to 6 years.
Rather than removing terminated employees from your roster, you should instead list them as dismissed. You can find step-by-step instructions for changing the status of an employee to dismissed here.