One of the biggest misconceptions among plan sponsors is that hiring a recordkeeper means someone else is now responsible for everything.
It doesn’t work that way.
A recordkeeper can process payroll files, maintain participant accounts, generate notices, and provide reports. What a recordkeeper cannot do is guess what you meant to do.
They don’t know you hired a new employee unless someone tells them. They don’t know an employee was rehired. They don’t know compensation was coded incorrectly in payroll. They don’t know ownership changed, a payroll vendor was replaced, or an acquisition brought in dozens of new employees.
Garbage in, garbage out still applies.
I’ve seen sponsors blame recordkeepers for operational failures that started with missing or inaccurate information. In reality, the recordkeeper processed exactly what it received.
That’s why communication matters.
Whenever something significant changes—payroll systems, eligibility rules, ownership, acquisitions, compensation practices, even office locations—your retirement plan providers should know about it. What seems unrelated to the business can have enormous retirement plan implications.
The best relationships between plan sponsors and recordkeepers aren’t transactional. They’re collaborative. Sponsors share information early, and providers ask questions before small issues become expensive corrections.
Don’t assume your providers know what’s happening inside your company. They don’t attend management meetings. They aren’t copied on HR emails. They aren’t sitting in payroll discussions.
They’re relying on you.
Think of your recordkeeper as a GPS. It can get you where you’re going, but only if you enter the correct destination.
The more complete and timely the information you provide, the more effective your providers can be. Communication isn’t just good customer service—it’s an essential part of keeping your retirement plan compliant.
Because no matter how sophisticated the technology becomes, your recordkeeper still can’t read your mind.
