A conversion plan is an existing 401(k) plan that transfers to Gusto Retirement from a different provider. Transferring a retirement plan takes about 75 – 90 days, depending on your current provider. Your dedicated Retirement Onboarding Specialist will guide you through every step until the asset transfer is done. This article covers what to expect at each phase, key milestones, and how to keep your team informed throughout the process.
Key milestones:
Complete your plan setup
Invite participants to onboard
Confirm transfer dates with your current provider within 30 days
Complete the asset transfer and start your plan within 90 days
The timeline below shows what to expect during a typical plan conversion. Your finalized timeline will be provided once you complete the plan setup guide with Gusto Retirement.
Week
Milestone
Week 1
Complete plan setup and upload documents
Week 2
Employees invited to enroll in the Gusto 401(k)
Week 8
Final contributions to previous provider; Gusto 401(k) plan begins
Week 12
Assets transfer from previous provider
The first step is to set up your plan and make it ready for employees to enroll. Your plan will not be finalized until all required tasks are done. You can track outstanding tasks from your plan sponsor dashboard.
Pro tip: Include your Onboarding Specialist in all communications with your existing 401(k) provider to help make the transition as smooth as possible.
To set up your Gusto Retirement account, follow these steps.
Sign in to your retirement sponsor dashboard and finish all outstanding tasks.
Sign your Service Agreement and Adoption Agreement.
Connect and verify your bank account.
Connect your payroll provider.
You will also need to upload the following documents:
Participant report — a census report covering all participants (active and dismissed) with a balance at your prior provider
Loan report — a list of participants with an active or deemed-distributed loan, or who repaid a loan within the last 12 months. We need this to continue servicing loans without interruption
Payroll roster — required only if your company does not use one of our integrated payroll partners. A template is available to download in the dashboard task (this is a separate file from the participant report)
Once you have signed off on your plan design, a transfer task will automatically appear on your administrator dashboard. Using the instructions in that task, notify your current provider that you are transferring your plan to Gusto Retirement. Mark the task complete to notify your Onboarding Specialist that you have started the transfer.
Important: Do not start your plan transfer until after you have finished plan setup. If you need to delay the plan start date, contact your Onboarding Specialist before the start date passes and before any major provisions in your Adoption Agreement change.
Your plan sponsor dashboard shows your onboarding timeline and important dates. Here's what each milestone means:
Enrollment invitations — invitations are automatically emailed to eligible employees 30 days before the plan start date. Employees can use the link to enroll or opt out. Learn more about employee enrollment
Plan start date — this is also the auto-enrollment date for employees who have not manually opted in or out. Depending on your payroll platform, your responsibilities for processing the first contributions may differ:
Gusto or Gusto Embedded payroll (HiBob and HR for Health) — the integration activates on the start date. No additional action is needed
Self-serve — you will need to make sure your payroll platform is set up to deduct employee deferrals when the plan starts
First contributions — the first day contributions are pulled into the 401(k) system is your official plan start date, which aligns with your payroll schedule
Notify your current provider of your intent to terminate their services and request that your plan be transferred to Gusto Retirement. Your Onboarding Specialist can provide a deconversion template to help you communicate this request and kick off the transfer.
Once your prior provider gets the notification, they will send transfer paperwork for you to complete and return. All information needed to complete the transfer documents is in the “Start your plan asset transfer” task in your 401(k) dashboard.
After the paperwork is submitted, your transfer timeline will be confirmed. You will need to enter your blackout and liquidation dates into the corresponding dashboard task so we can send required blackout notices to your employees.
Make any final payments to your existing provider before the blackout period begins, or by the date your prior provider specifies.
After all assets have transferred, your prior provider will send a deconversion packet. Forward this to your Onboarding Specialist so assets can be allocated to participant accounts.
Important: You are required to continue making payroll contributions to your previous provider until your Gusto 401(k) plan starts. Missed or late contributions may cause corrections. We charge an extraordinary service fee for any correction that needs to be processed on behalf of the plan.
A blackout period is a temporary freeze on participant account activity during the transfer. The Internal Revenue Service (IRS) requires that participants get at least a 30-day notice before a blackout period that may affect their ability to make changes or transactions within their accounts.
During the blackout period, participants will be unable to:
Direct or diversify existing investments
Get a loan
Take a distribution from accounts held by the current provider
30 days before the blackout start date, we will send a blackout notice to all affected participants who have a valid email address on file. For participants without an email address, you — as the plan sponsor — are responsible for sending the required notices by certified mail.
Note: Email addresses are required for all participants with a balance at the prior provider, including dismissed participants. The IRS requires that any participant with a 401(k) plan balance get notice of changes that affect their account. If you cannot provide a participant's email address, you will need to send notices by certified mail. Here's why we need contact details for dismissed employees.
The final phase is to collect reports from your prior provider and make sure assets are allocated to participant accounts before the blackout period ends. Your Onboarding Specialist may need your help obtaining reports to finalize the transfer.
Deconversion reports are the final reports from your prior provider showing a detailed breakdown of participant assets by source. Timing varies by provider, but reports are generally available about one week after assets are liquidated and transferred. Watch for these reports so we can get them on time.
About 30 – 45 days after your plan start date, your previous provider will liquidate your plan assets and wire the funds to Gusto Retirement.
To upload your reports, follow these steps.
Upload the deconversion reports to the corresponding task.
Monitor your dashboard for any additional requests from our team.
A blackout period usually lasts 30 days, but may be longer depending on your provider. By the end of the blackout period, all assets will be allocated to participant accounts based on each participant's investment elections on file.
All participant funds transfer to Gusto Retirement at the plan level. Participants only need to request an individual rollover for assets held outside of your current plan that they want to transfer separately.
Once your plan has been successfully onboarded, your dedicated Client Relationship Manager will be your main point of contact for ongoing plan servicing.
After assets are allocated to participant accounts, up to 2 additional tasks may appear on your dashboard. This information helps us accurately file your plan's Form 5500 by the due date, which is the last day of the seventh month from the plan year's end.
Upload the year-to-date participant report — if this report was not included with the final deconversion reports, a task will appear in your dashboard. Contact your prior provider to obtain this report, which shows a breakdown of year-to-date participant contributions by source
Provide pre-Gusto plan activity for annual report filings — this covers plan activity from Jan 1 through the date assets transferred to your Gusto plan. Your prior provider can help you obtain this information, which is used to file the Form 5500 for the year of the transfer
The pre-Gusto activity task asks for the following:
Prior provider information:
Total plan assets used to pay plan service providers
Total plan assets used to pay insurance service providers
Plan assets used to pay other expenses (audit, brokers, advisors, and more)
Number of participants who were terminated before reaching 100% vesting
Whether you filed Form 8955-SSA reports in the past
Prior plan assets:
Were all invested assets considered eligible assets?
Was your plan involved in a merger or spinoff, and were there any asset transfers as a result?
Prior plan errors:
Amount of participant contributions or loan payments that failed to transmit within seven business days after being withheld from participants' paychecks
Amount of benefits — like required minimum distributions (RMDs) — that the plan failed to pay when due
Any loss to the plan caused by fraud or dishonesty
Any non-exempt transactions that occurred
Gusto Retirement does not charge a standalone fee for 401(k) plan transfers, but other providers may charge a deconversion fee when you leave. Check with your previous provider for any transfer fees that may apply.
Prior year profit-sharing contributions for conversion plans transferred in the current year can be processed by Gusto Retirement as long as your company's tax filing deadline has not passed and an allocation breakdown has been provided by the prior administrator. We cannot modify allocations calculated by outside parties — any corrections or changes must be made by the prior administrator before we can process them.
Beginning with the current year, we will calculate and process profit-sharing contributions for plans that request them.
We will prepare the annual Form 5500 beginning with the year your plan transferred to Gusto Retirement. Your prior provider is responsible for filing the Form 5500 for the prior year.
For example, if your plan transferred in 2026, we will prepare the Form 5500 filing for the 2026 plan year-end. Your prior provider will file the form for the 2025 plan year.
For conversion plans that transfer later in the year, we can file the Form 5500 if all assets are received before Dec 31 of the same plan year, and we get a year-to-date report reflecting all financial activity for each participant.
Your previous plan design may have included a true-up provision. A true-up may require additional employer contributions to be allocated to employees who have not received the full employer contribution for the year at the time of transfer.
Note: An annual true-up is not a service we offer except when required for conversion plans. You cannot add a true-up provision to your 401(k) plan after conversion.
For plan sponsors and administrators: To reach your dedicated Onboarding Specialist, go to your dashboard after the required documents have been signed. For general questions, contact the Onboarding Team at [email protected].
For participants: Our Help Center has guides and FAQs to help with the Gusto 401(k). If participants need additional help, our dedicated Retirement Participant Care team is available to help.
The information provided herein is general in nature and is for informational purposes only. It should not be used as a substitute for specific tax, legal, and/or financial advice that considers all relevant facts and circumstances. You are advised to consult a qualified financial adviser or tax professional before relying on the information provided herein.