As we enter the fourth quarter of 2019, it’s important for sponsors of calendar year retirement plans to be mindful of certain required participant notices. Sponsors of qualified retirement plans, such as 401(k) or 403(b) plans, may need to provide several of these notices per various Internal Revenue Service and Department of Labor regulations.
Sponsors with calendar year plans that extended their Form 5500 deadline to Oct. 15 may be able to align the delivery of any applicable notices into a single mailing event.
In addition to the above notices, plans must provide a Summary of Material Modifications to participants no later than 210 days following the plan year in which an amendment was effective. Alternatively, providing an updated Summary Plan Description satisfies this requirement. Updated SPDs are required to be provided every five years if material changes are made or every 10 years if no material changes have been made. If you recently amended or restated your plan document, this upcoming annual notice mailing may provide an opportunity to satisfy the SMM/SPD requirement as part of the same mailing.
While the DOL and IRS each have rules for distributing these notices electronically, abiding by the rules can be challenging. Per our subsequent article, DOL e-delivery regulations finalized in May 2020 have made this task easier and more cost-effective in many situations..
It’s important to note that in addition to the annual requirements, these notices should be provided to employees in your plan enrollment materials before or coincident with each participant’s eligibility for the plan.
Finally, there may be other participant notices that apply for defined benefit plans, other benefit plans or for situations such as plan terminations, blackout periods and disclosure of electronic statement delivery. Be sure to work with your service providers and make sure all applicable notices are mailed out as required by the IRS and DOL.
If you have any questions, or would like to begin talking to a retirement plan advisor, please get in touch by email or by calling (800) 388-1963.
Notice | Purpose | Audience | General Deadline | Deadline for Calendar Year Plans |
Qualified Default Investment Alternative | Informs of the plan’s default investment in the event the participant does not make an investment election. Helps maintain 404(c) protection. | Active eligibles and terminated participants | At least 30 days ahead of plan year | Dec. 2 |
Automatic Contribution Arrangement | Informs of the plan's feature to automatically enroll participants to a default savings rate in the plan and the potential “refundability” of deferrals. | Active eligibles | 30 to 90 days ahead of plan year | Dec. 2 |
Safe Harbor | Informs of the plan's intent to provide a safe harbor contribution, alongside other key plan provision details. | Active eligibles | 30 to 90 days ahead of plan year | Dec. 2 |
Universal Availability | Informs 403(b) participants about the opportunity to establish or change their salary deferrals in the plan. | Active eligibles | Annually | Dec. 31 |
Plan and Investment Fee Disclosure | Summarizes fees that may be paid from participant accounts or withheld by investment companies. | Active eligibles and terminated participants | Every 14 months | Depends on timing of prior mailing |
Summary Annual Report | Summarizes the plan's key financial and administrator information with respect to the prior year's Form 5500 filing. | Active and terminated participants | 60 days following the plan’s regular or extended Form 5500 filing deadline | Sept. 30 or Dec. 16 |
Sponsors with calendar year plans that extended their Form 5500 deadline to Oct. 15 may be able to align the delivery of any applicable notices into a single mailing event.
In addition to the above notices, plans must provide a Summary of Material Modifications to participants no later than 210 days following the plan year in which an amendment was effective. Alternatively, providing an updated Summary Plan Description satisfies this requirement. Updated SPDs are required to be provided every five years if material changes are made or every 10 years if no material changes have been made. If you recently amended or restated your plan document, this upcoming annual notice mailing may provide an opportunity to satisfy the SMM/SPD requirement as part of the same mailing.
While the DOL and IRS each have rules for distributing these notices electronically, abiding by the rules can be challenging. Per our subsequent article, DOL e-delivery regulations finalized in May 2020 have made this task easier and more cost-effective in many situations..
It’s important to note that in addition to the annual requirements, these notices should be provided to employees in your plan enrollment materials before or coincident with each participant’s eligibility for the plan.
Finally, there may be other participant notices that apply for defined benefit plans, other benefit plans or for situations such as plan terminations, blackout periods and disclosure of electronic statement delivery. Be sure to work with your service providers and make sure all applicable notices are mailed out as required by the IRS and DOL.
If you have any questions, or would like to begin talking to a retirement plan advisor, please get in touch by email or by calling (800) 388-1963.