How to Become a 401K Administrator: Step-by-Step Career Guide

Aug 13, 2018

Research the requirements to become a 401K administrator. Learn about the job description and explore the step-by-step process to start a career in 401K administration.

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401K Administrator Overview

Degree Level Bachelor's degree
Degree Fields Human resource management, business administration, finance, or a related major
Certification Some positions require certification from a professional human resources organization
Experience Several years of experience in finance or human resources
Key Skills Excellent written and oral communication, strong analytical, and decision-making abilities; familiarity with accounting, analysis, human resources, and project management software
Salary $121,630 (2015 median for all compensation and benefits managers)

Sources: U.S. Bureau of Labor Statistics, O*Net Online

Benefits administrators manage employee benefits within a company. Some administrators specialize in retirement savings programs, such as 401K plans. They may keep records of employer and employee contributions, serve as vendor liaisons, and deduct pre- and post-tax wages.

401K administrators, like other kinds of compensation and benefits managers, usually work at least full-time and often are asked to work more than 40 hours per week. They work in office settings and may sit and utilize computers and phones for long periods of time. People in this position typically have a bachelor's degree and several years of industry experience.

401K administrators need excellent written and oral communication skills along with strong analytical and decision-making abilities. They must be familiar with accounting, analysis, human resources, and project management software. According to the U.S. Bureau of Labor Statistics, compensation and benefits managers (which includes 401K administrators) earned a mean annual salary of $121,630 as of May 2015.

Step 1: Obtain a Bachelor's Degree

Prospective 401K administrators may pursue bachelor's degrees in human resource management, business administration, business management, finance, or another related field. Bachelor's degree programs in human resource management typically include courses in economics, statistics, accounting, and finance. They may also cover topics such as business law and ethics, information systems, and professional communication.

Step 2: Gain Work Experience

Candidates can start their careers as assistant administrators of benefits or in other human resource or finance positions. Duties for assistant administrators might include gathering information on retirement plans, comparing benefits, and assisting with report preparation. New hires may also gain experience with compliance standards and eligibility requirements.

After advancing to a 401K administrator position, individuals might opt to earn certification from the American Society of Pension Professionals and Actuaries. Candidates for the Qualified 401(k) Administrator certification. Candidates must complete four exams and have at least two years of work experience. Maintaining certification requires 40 hours of continuing professional education every two years and renewing ASPPA Membership annually.

Step 3: Earn a Master's Degree

After several years of experience as 401K administrators, employees might be able to advance to positions as human resource, compensation, or benefits directors. Many employers prefer to hire professionals with a master's degree for these advanced jobs. A graduate program that concentrates on human resources management, finance, or business administration could prove particularly useful.

In summary, a 401K administrator typically needs a bachelor's degree in human resource management, business administration, or a related field, as well as work experience in an entry-level human resource or finance position. Voluntary certification is available and earning a master's degree could lead to advanced job opportunities.

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