Payroll and Plan Administration Industry Faces Administrative Challenges

Industry analysis noted that loans are offered by 80% of employee benefit plans, covering over 90% of eligible employees, according to a Vanguard report. Furthermore, while Emergency Savings Plans are encouraged under SECURE 2.0, only 1.3% of plans currently offer them, according to a PSCA survey. The reports also highlighted that a lack of integration between payroll and plan administration systems can create operational difficulties.

These administrative complexities affect how retirement plans operate and how employees participate in them. The difficulty in administering features like loans and the low adoption rate of emergency savings plans present ongoing operational challenges for plan administrators. The need for better payroll integration is critical for efficient plan management.