The prospects of their retirement plan being audited by the Department of Labor is not something any plan sponsor wants to think about. Now there’s a new service that can put those fears to rest.
“The new DOL Audit Defense service and embedded tax credit support are both the first of their kind in the industry.”
Rakesh Mahajan, Human Interest
San Francisco-based 401(k) provider Human Interest announced this week is it the first to market with three new services for customers that remove barriers which can make providing retirement benefits costly, risky, and difficult—including a DOL audit.
“DOL Audit Defense,” now available for Human Interest’s Concierge package customers, provides up to $50,000 in audit expense coverage. Human Interest said in an April 4 press release it is the first and only provider in the industry to offer this protection.
The other two new services are called “Tax Savings Maximizer,” which simplifies the process of claiming tax credits to reduce or fully cover 401(k) plan costs, and “Notice Delivery Protection,” which alleviates most of the burden and cost of sending paper mail notices to employees.
“The new DOL Audit Defense service and embedded tax credit support are both the first of their kind in the industry. Our new services may save employers upwards of 100 hours of administrative and compliance work per year and tens of thousands of dollars in costly, unplanned expenses,” said Rakesh Mahajan, Human Interest’s Chief Revenue Officer.
Why DOL Audit Defense?
The DOL routinely audits 401(k) plans, resulting in hours of unexpected extra work and administrative headaches, especially for small and mid-sized businesses that don’t have in-house legal counsel with experience responding to industry regulators.
DOL’s Employee Benefits Security Administration (EBSA) is responsible for conducting investigations and audits into 401(k) plans. According to the EBSA’s annual fact sheets, the 5-year average for funds recovered by EBSA investigations including audits of 401(k) plans is $573.5 million (FY2019-FY2023). In each of those years, more than 65% of investigations included some type of corrective action or monetary return.
This represents a step-change in the impact of EBSA’s investigations, Human Interest says. The previous 5-year average (FY2014-FY2018) was $520.9M, and the 5 years before that (FY2010-FY2014) was $260.9M.
A Human Interest survey of nearly 500 businesses revealed that compliance monitoring and protection are two of the top three highly valued services of 401(k) plans. The company said combining DOL Audit Defense with Human its 360 Degree Compliance Monitoring service can help keep plans compliant and offer peace of mind by proactively alerting plans of potential issues and assisting with DOL and IRS form filing.
As part of its Concierge package, Human Interest’s DOL Audit Defense service provides access to vetted law firms specializing in supporting plans through a DOL audit and up to $50,000 to cover qualified expenses.
Why Tax Savings Maximizer?
Though the SECURE Act offers numerous tax credits for offering a 401(k) plan, identifying and claiming the credits a small to medium-sized business may be qualified for can be complicated. Tax Savings Maximizer makes it easy for business owners to dramatically cut the cost of their 401(k) plan and helps customers proactively take advantage of these savings.
Human Interest said more than 80% of its customers were eligible for tax credits in 2023. The majority of clients eligible for credits covered 100% of employer costs.
The Tax Savings Maximizer service helps plan administrators avoid missing out on multiple tax credits including the Retirement Plan Startup Cost Tax Credit and other credits by providing reminders to file and downloadable data inputs to IRS Form 8881 that can be shared with CPAs. Notably, Human Interest provides this service without sharing any confidential information with third parties.
Why Notification Delivery Protection?
The DOL requires employers to physically deliver notifications if employees opt out of electronic communication or electronic delivery fails. Employers generally meet this obligation by sending notices via paper mail, which costs time and money.
While many 401(k) providers charge transaction fees of up to $2.50 per envelope—or pass the responsibility entirely to the employer—Human Interest’s Notice Delivery Protection takes most of this burden off of employers. In addition to sending electronic delivery notices to plan participants, Human Interest provides paper mail coverage for legally required plan notices and disclosures.
“401(k) compliance, auditing, and administrative overhead can be just as complex for small businesses as for large enterprises,” Mahajan said. “Human Interest is empowering businesses of all sizes with the tools they need to not just check the box of offering a 401(k), but actually supporting them through audits, tax alerts, and cost-effective communication solutions.”
Founded in 2015, full-service 401(k) and 403(b) provider Human Interest has helped employees at 20,000+ companies access retirement benefits and a path to financial independence.
SEE ALSO:
• EBSA Recovered $1.4 Billion in 2023 for Employee Benefits Plans, Participants and Beneficiaries
• Human Interest Streamlines Retirement Planning Process with Fast Track 401(k)
• 3% Cash Back to Save for Retirement: Human Interest Launches ‘Industry First’
Veteran financial services industry journalist Brian Anderson joined 401(k) Specialist as Managing Editor in January 2019. He has led editorial content for a variety of well-known properties including Insurance Forums, Life Insurance Selling, National Underwriter Life & Health, and Senior Market Advisor. He has always maintained a focus on providing readers with timely, useful information intended to help them build their business.
