Annual Reconciliation

Validation Process

Reconciliation of all plan financials is critical to a smooth and successful annual compliance review. To do this we follow a multi-step validation process, but to do so, we need your help.

Step 1First, we’ll need a final file that contains all payroll data for the entire plan year. Even if you started working with Pinnacle Financial Services (Pinnacle) later in the year, we’ll still need this file to cover all 12 months. It’s important to note, the file should include all employees who earned any compensation for check dates paid during the plan year.

The absolute deadline to submit your year-end file is January 31st, earlier is best – first in, first out. If we do not receive your file by January 31st in good order, we will not be able to complete the reconciliation and applicable compliance testing in time. Any necessary returns that are processed late as a result of compliance testing are subject to excise tax paid to the IRS by the employer directly. Your late file submission could also result in a late filing of your individual 5500 or the late filing of the Multiple Employer Plan’s 5500, if you are part of a group. A late filing would result in penalties paid by the employer to the Department of Labor. We definitely want to avoid any situations where penalties could be assessed.

You may ask, “Why do I need to provide a final census, if I’ve been sending you files all year?” That’s a good question. Our goal is to ensure your plan’s accuracy and to account for all employee transactions. Yes, we’ve performed compliance checks per pay period, however, we want to cross-check your year-end file with the data in our system based on the files you’ve sent throughout the year. We’re checking for things like:

Voided checks that weren’t captured

Bonuses or additional compensation that were paid and weren’t captured on the payroll files

Any year-end adjustments that were made when your W-2s were processed

Again, your year-end file is due to us by January 31st. You can upload the file to the same secure website you’ve been using for your periodic payroll files.


We go above and beyond industry standards to confirm your plan accurately balances and reconciles. Once we’ve reconciled your year-end files with our records, Pinnacle performs one last comprehensive review.

Step 2We compare your year-end file to your Investment Company’s records to verify all participant accounts match, by money source. There are multiple benefits to Pinnacle’s Transactional Reconciliation Process:

We reconcile your plan to a high standard of accuracy, and you’ll be able to account for all transactions within your plan year.

Our process guarantees the highest level of accuracy for your participants.

We ensure the highest level of compliance for your plan avoiding any IRS or DOL regulatory issues.

And, we can deliver an accurate IRS Form 5500 on your behalf.

If this is your first year with us, it’s likely we’ll find errors from your previous plan provider. We’ll gladly help fix those mistakes and help make sure next year’s processing goes a lot smoother. If you have any questions, please email or call 561-547-4200 and ask for a member of our Reconciliation team. We’re here to help.