The Case for Integration = Working Smarter, Not Harder

Meet Sarah, a dedicated small business owner.

Recently, she set up a 401(k) plan to help her employees save for the future and accelerate her personal wealth accumulation and corporate tax deduction goals.

Sarah was thrilled with the plan design, outcomes, tax credits and set up of the Plan, but she quickly found herself overwhelmed by the manual processes involved in tracking employee eligibility, managing contributions, and year-end compliance requirements.

Determined to find a solution, Sarah worked with CrossPlans to better understand the helpful and time-saving benefits of integrating her payroll system with the 401(k) plan recordkeeper.​ In 2025, there have never been more solutions available to Plan Sponsors between payroll companies, recordkeepers and third-party tech firms providing integration to simplify payroll by payroll remittance as well as year-end data submissions.

The Power of Payroll Integration for 401(k)

Integrating payroll with your 401(k) recordkeeper helps streamline administrative tasks by automating the flow of data between payroll and your 401(k) recordkeeper's systems. This seamless connection reduces manual intervention, minimizes errors, enhances overall efficiency each pay period and can even provide your TPA with real-time access to payroll reports to support with loans, distributions and the inevitable money source issue. At year-end, during the dreaded census data process, some providers CrossPlans works with actually allow your TPA to automate much of the year-end census collection!​ 

Time-Saving Automation

Manual data entry for 401(k) contributions and year-end census collection is not only tedious but also prone to errors. Payroll integration automates this process, ensuring that employee deferrals and employer matches are accurately calculated and transferred without the need for repetitive data input. This automation allows business owners like Sarah to focus more on strategic initiatives rather than getting bogged down by administrative tasks. ​Tracking entry, eligibility and even Long-Term, Part-Time employees has never been easier!

Enhanced Data Accuracy

Errors in retirement plan contributions can lead to compliance issues and employee dissatisfaction. By integrating payroll with the 401(k) recordkeeper, data is synchronized in real time, significantly reducing the risk of discrepancies. For instance, any changes in employee information or contribution rates are automatically updated across both platforms, ensuring consistency and accuracy. ​

Improved Compliance & Year End Processing

The timely and accurate remittance of employee contributions is a critical compliance requirement. Integrated systems facilitate prompt deposits, helping businesses adhere to regulatory deadlines and avoid potential penalties. Moreover, the automatic synchronization of data assists in maintaining up-to-date records, which is essential for compliance reporting and audits. Many of the top providers even allow CrossPlans to have real-time access throughout the year to answer quick questions, verify data, and, most importantly, simplify the year-end data collection process.  ​

Understanding Integration Models: 180° vs. 360°

When considering a payroll integration provider, it's important to understand the two primary models:

• 180° Integration: This unidirectional approach transfers data from the payroll system to the 401(k) platform. While it automates some processes, any changes made within the 401(k) system, such as employee deferral adjustments, must be manually updated in the payroll system. It’s fine, but it could be better. 

• 360° Integration: This bidirectional model enables seamless data flow between payroll and 401(k) systems. Updates in one system are automatically reflected in the other, ensuring real-time accuracy and reducing administrative workload. Now that’s working smarter. ​

CrossPlans can work with you to determine what solutions and which payroll integration partners work best for your Plan based on your Payroll Provider and your 401(k) Recordkeeper. We work with the top providers and have dedicated team members who can help you set up the functionality and help guide the process.

Your Real Impact

The advantages of payroll integration are supported by some pretty compelling statistics:

• Reduced Administrative Burden: Businesses that implement payroll integration can save approximately 30 hours annually on retirement plan administration. ​

• Lower Error Rates: Automated data transfers significantly decrease the likelihood of errors associated with manual entry, enhancing overall data integrity. ​

• Increased Employee Participation: Companies offering integrated 401(k) plans often experience higher employee participation rates, as the streamlined process encourages enrollment and consistent contributions. ​

Cost Considerations

While there are costs associated with implementing payroll integration, the investment often yields substantial returns in efficiency and compliance. For example, setting up a 180° integration may involve a fee ranging from $50 to $500, with additional per-payroll costs. A more comprehensive 360° integration might have higher initial setup fees but offer greater automation and long-term savings. ​

These costs are significantly less than paying CrossPlans to do manual data entry for census submissions and to manage and pay penalties for late contributions and lost earnings.

A Strategic Move for Business Success

For business owners like Sarah, integrating payroll with a 401(k) plan is more than a technological upgrade; it's a strategic decision that enhances operational efficiency, ensures compliance, and supports employee satisfaction. By automating data flows and reducing manual tasks, payroll integration empowers businesses to focus on growth and support their workforce's financial well-being.​

Ready to streamline your 401(k) administration and unlock the benefits of payroll integration? Contact CrossPlans today to learn how our various preferred partners and their solutions can transform your retirement plan management and contribute to your business's success today.

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Dana Point, CA

714.210.4164

info@crossplans.com

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