Insperity, Inc. (NYSE: NSP), a leading provider of human resources and business performance solutions for America’s best businesses, today announced a streamlined 401(k) deposit feature for Workforce Optimization Solution TM clients that use the integrated 401(k) services offered through Insperity Retirement Services. The company now has the capability to provide next-day remittance of 401(k) contributions to the accounts of participating employees.
The United States Department of Labor (DOL) has articulated that 401(k) contributions withheld from employees’ paychecks should be invested into their accounts as quickly as possible to avoid a fiduciary violation. Every day that the contributions are withheld from investment in the market could mean lost earnings for each employee. However, for most businesses, it is not administratively feasible to calculate payroll, issue paychecks, confirm withholdings and deposit those withholdings within a 24-hour period.
“This is another way that we help business owners not only reduce their administrative burdens and the associated costs, but also actually improve the services they offer their employees,” said Richard G. Rawson, Insperity president. “We believe that our next-day processing, together with the low cost and strong investment performance within our 401(k) plans, provides enhanced retirement savings opportunities for employees and client owners.”
During the past 15 years, the DOL has investigated the timing of deposits by employers and has moved to crack down on companies that delay remittance of contributions. In 2010, the DOL issued additional guidance for businesses with 100 or fewer employees, stating once again that deposits must be made as soon as administratively feasible and providing a safe harbor for these businesses when the deposits are made within seven business days.“With today’s technology, clients utilizing our integrated 401(k) service offering benefit from quicker deposits than the DOL’s seven business days’ standard,” said Rawson. “In providing their employees with a benefit such as a 401(k) plan, business owners, who are often participants in the plan themselves, want an integrated contribution system that allows retirement savings to grow as quickly as possible. Compounding returns over a longer time period is one of the critical elements to accumulating retirement savings, and that’s why we set the goal to deposit contributions one business day after the payroll has been processed for each one of our Workforce Optimization Solution clients.”