401(k) plans are a key part of retirement savings, with nearly 70 million U.S. participants having access to them, according to the Center for Retirement Research at Boston College.

Despite their popularity, the processes behind these plans are often outdated. Manual rollovers are slow and prone to errors, adding extra challenges for plan sponsors already managing numerous tasks.

This article will explore the benefits of digitizing 401(k) rollovers, showing how modernizing these processes can save time, reduce stress, and improve the experience for both plan sponsors and participants.

The Problem With Manual Processes

Managing 401(k) rollovers manually is time-consuming and stressful. Filling out forms, making calls, and waiting weeks for updates takes plan sponsors away from higher-priority work and increases the risk of errors like mistyped account details, misplaced paperwork, or missed deadlines. Compliance requirements only add to the burden when using outdated systems.

A confusing or inefficient process often leads participants to lose track of their old retirement accounts or cash them out, jeopardizing their savings. Even those who successfully roll over balances into IRAs may face setbacks. Research from Vanguard Group shows that nearly a third of participants who rolled funds into IRAs in 2015 still had their balances sitting seven years later, missing out on growth opportunities critical for retirement.

The inefficiencies and poor outcomes of manual rollovers highlight the urgent need for digitization.

What Digitization Means for 401(k) Rollovers

Digitizing 401(k) rollovers replaces outdated, error-prone processes with faster, more efficient systems. Platforms like Manifest help consolidate retirement accounts and manage participant communication for plan sponsors. Instead of dealing with piles of paperwork and long waits, rollovers can be completed in days with minimal effort.

Digital solutions also automate the process, helping plan sponsors track rollovers, identify bottlenecks, and resolve issues quickly. For example, Manifest can reduce rollover times from 60 to 14 days, with participants initiating the process in as little as 10 minutes. This is a huge step forward from the traditional back-and-forth of manual rollovers.

Benefits For HR Teams

Switching to digital 401(k) rollovers makes life easier and benefits plan sponsors. Here's how:

  • Saves time: Manifest's automated processes replace hours of manual paperwork, calls, and tracking, completing rollovers in minutes—not weeks. This gives plan sponsors more time to focus on strategic initiatives.
  • Reduces stress: With fewer errors and no required integrations, plan sponsors no longer need to troubleshoot rollovers or chase updates, minimizing frustration for both teams and participants.
  • Cuts costs: Increased efficiency reduces administrative overhead and encourages participants to transfer their inactive accounts out as they switch jobs, saving employers from paying for dormant 401(k)s.
  • Improves accuracy: Manifest's automated tools ensure accurate data transfers, reducing compliance risks and errors that often derail rollovers.
  • Adds to your benefit: As businesses grow, manually managing higher volumes of rollovers becomes unsustainable. Manifest's platform seamlessly adds to your existing benefits, handling large participant populations without adding to plan sponsors' workload.

The Participant Perspective

401(k) rollovers are also a big deal for participants. Many participants feel intimidated by the process, especially when they see themselves as savers rather than investors. According to a study from Schwab, 64% of 401(k) participants describe themselves this way.

Manifest makes rollovers simple, fast, and stress-free. Participants can consolidate retirement accounts in a 10-minute, fully digital process without confusion or delays. Users are afforded 25+ security checks and clear, step-by-step guidance to feel more confident making decisions about savings.

Participants are given 24/7 visibility and control over their accounts, while clear, automated guidance eliminates guesswork. By removing transfer barriers, Manifest empowers participants to rollover confidently, leading to better-managed accounts, higher savings balances, and stronger long-term outcomes.

Integrating Digital Rollovers Into A Broader Benefits Strategy

Digitizing 401(k) rollovers is an opportunity to improve your entire benefits strategy. Connecting retirement rollovers with other benefits creates a more cohesive and engaging participant experience.

Platforms integrating rollovers with health savings accounts (HSAs) or emergency savings programs can give participants a complete picture of their financial well-being, beyond just 401(k)s. This boosts engagement and helps participants make smarter decisions about their benefits.

Overcoming Common Challenges

While the benefits of digitization are clear, some plan sponsors worry about the transition process. Common concerns include:

  • Upfront costs: While implementing digital platforms may require an initial investment, solutions like Manifest operate efficiently without burdening plan sponsors. Manifest's platform is free for plan sponsors and participants.
  • Resistance to change: Plan sponsors and participants may hesitate to adopt new systems. Manifest is a simple, provider-agnostic add-on to any retirement plan that can get up and running in under 30 minutes.
  • Integration concerns: Manifest doesn't require any integrations, making implementation quick and seamless without disrupting existing benefits systems.

How Digitizing 401(k) Rollovers Drives Real Results

Plan sponsors need tools that are efficient, reduce administrative burdens, and allow them to focus on supporting participants. Digitizing 401(k) rollovers streamlines a traditionally complex process, delivering real benefits for plan sponsors and participants.

Consolidation brings immediate benefits, including faster processing times, reduced workloads, and fewer compliance issues.

Participants benefit from reduced delays, clearer guidance, and a quick rollover experience. Most importantly, Manifest helps to achieve a 54% reduction in cash-outs and drives an average of $13,450 growth in account balances, which preserves participants' retirement savings and contributes to their long-term financial success.

Simplifying the Future of Retirement Rollovers

Switching from manual to digital 401(k) rollovers is all about helping people save more for retirement. It's time to abandon the paperwork and embrace a smoother, more efficient way of managing 401(k) rollovers.

Contact us today to upgrade your team’s retirement benefits.