Question
As a plan sponsor, what actions do I need to take to manage a 401(k) plan that's switching providers?
Answer
A conversion plan is a name given to any existing 401(k) plan that is switching 401(k) providers. As a plan sponsor for a conversion plan, you have two additional responsibilities to be mindful of:
Continue to Administer Your Existing Plan in Toast
Since you are switching 401(k) and Payroll providers, you may run your first payroll with Toast before your Vestwell plan becomes active.
If this is the case, then you may need to continue to administer your existing 401(k) plan in Toast Payroll and provide your former 401(k) administrator with payroll information until your plan is active with Vestwell. This will prevent your plan from experiencing any interruptions.
Once your 401(k) is active with Vestwell, Toast will assume responsibility for administering your plan in Toast.
Your plan becomes active with Vestwell as of your first payroll with Vestwell. Speak with your Vestwell representative to confirm this date.
Speak with your Toast Onboarding Consultant for assistance in setting up your existing plan in Toast Payroll. Here are a few steps to remember:
Create the applicable deduction(s) for each participant.
Consult with your former 401(k) provider on how to continue the plan until the conversion is complete. This may require you to:
Create a Custom Payroll Report in Toast that can be used to provide your former 401(k) provider with contribution details.
Establish a remittance/payment process for 401(k) and Roth contributions.
Provide a List of Outstanding Loans to Toast and Vestwell
Toast: During the Toast Onboarding process, work with your Toast Onboarding Consultant to ensure that existing 401(k) loans are added to Toast.
Vestwell: During the Vestwell Onboarding process, provide Vestwell with a list of participants with outstanding loans (see Vestwell Administrator Support).
This content is for informational purposes and is not intended as legal, tax, HR, or any other professional advice. Please contact an attorney or other professional for advice.