What is required for 401(k) recordkeeping?
Meticulous 401(k) recordkeeping must reflect the various contributions to the 401(k) and the crediting of investment earnings and amounts distributed from it. Unless the company is very small, it is important that 401(k) recordkeeping be coordinated with the payroll system. Plans must monitor, separately, employee deferrals and after-tax voluntary contributions as well as employer matching, qualified non-elective and profit sharing contributions. Recordkeeping is considerably more complicated when participant-directed investments are available than when investments they are pooled.
