Automating 401(k) Contributions through a “360” File Feed Integration
Written by Dyanna Serrano
Client Overview
Our client, a mid-sized company based in New York and Florida, was facing significant challenges with their current 401(k) management process. They were using ADP Workforce Now (WFN) for payroll but only had a manual system in place to enter each employee’s 401(k) contribution data into their 401(k)-record keeper’s system after each payroll cycle. This manual process was time-consuming and prone to human errors, leading to discrepancies and potential compliance issues.
The Challenge
The manual data entry process involved updating employee records for 401(k) contributions every pay period. With the company’s workforce growing, this process became increasingly cumbersome, and errors were becoming more frequent. Mistakes in data entry not only caused delays in the processing of 401(k) contributions but also led to discrepancies that required significant time and resources to resolve. The client needed a more efficient and reliable method to manage their 401(k) contributions.
“We collaborated closely with the selected 3rd party integration vendor and the 401(k)-record keeper to set up and test the integration.”
The Solution
After evaluating various options, we recommended implementing a full 360 integration with the client’s 401(k) record keeper. This “360” option offered a seamless way to automate the transfer of payroll data from ADP to the 401(k)-record keeper and vice versa. The integration provided a direct connection between the two systems, eliminating the need for manual data entry and reducing the potential for human error.
Implementation:
- Research and Vendor Selection: We conducted thorough research on available integration options and engaged with several vendors. The “360” feed with the selected 3rd party vendor stood out due to its robust features, ease of use, and compatibility with both ADP WFN and the client’s 401(k) record keeper.
- Integration Setup: We collaborated closely with the selected 3rd party integration vendor and the 401(k)-record keeper to set up and test the integration. This involved mapping the necessary data fields, configuring the integration settings, and ensuring secure data transfer between the systems. Rigorous testing was conducted to ensure that the integration was working as expected. We ran parallel payrolls to validate the accuracy of the data being transferred and adjusted as needed.
The Outcome
- Increased Efficiency: The implementation of the 3rd party “360” payroll integration drastically reduced the time spent on processing 401(k) contributions. What once took hours of manual data entry was now completed automatically with each payroll cycle.
- Error Reduction: The automation of data transfer eliminated human errors associated with manual entry, resulting in accurate and timely 401(k) contributions. This also reduced the need for corrections and follow-up, saving the client both time and resources.
- Improved Compliance: With accurate data being transferred automatically, the client experienced fewer compliance issues related to 401(k) contributions. This not only mitigated risks but also enhanced the company’s overall financial management.
- Cost Savings: By eliminating the need for manual data entry and reducing errors, the client saved on labor costs and avoided potential penalties related to 401(k) compliance issues.
The 3rd party integration of the “360” file feed with ADP and the client’s 401(k) record keeper was a successful project that met the client’s needs for efficiency, accuracy, and compliance. This case study demonstrates the value of leveraging technology to streamline HR processes, reduce risks, and ultimately improve business outcomes.