One common problem with plan management is correctly providing required notices to participants on a timely basis. There are many notice requirements, depending on what activity is occurring within your plan, and notice requirements can be particularly tricky when you have terminated employees who are still participants in the plan. Notably, there can be substantial civil penalties or the loss of certain plan protections if participants receive late notices or none at all.

The key to meeting the requirements is to make sure someone or some organization “owns” the process. The key is to have a process that ensures all notices get delivered to all participants that must receive them, in the required communication format, and on a timely basis.

Below are some required participant notices you should be familiar with:

Summary Plan Description – Within 90 days after an employee becomes a participant; and for a new plan within 120 days of the plan’s establishment and then every five years if there have been changes and every ten years if no changes have occurred.

Summary of Material Modifications – For custom plans within 210 days after the close of the plan year if any plan amendments were made.
Summary Annual Report – Generally due within nine months after the plan year end.

404(a) Participant Fee Disclosure – For participant-directed plans, a list of all investments and transaction fees once every 14 months. The dollar amount of fees must be disclosed quarterly, which is often included on participants’ quarterly statements.

Safe Harbor Notice – If the plan is utilizing a safe harbor provision then 30-90 days prior to the start of the plan year.

QDIA Notice – If selecting a Qualified Default Investment Alternative then a notice must go out 30 days prior to the start of a plan year.

Automatic Enrollment Notice – If the plan automatically enrolls employees, 30 to 90 days prior to the beginning of each plan year.

Blackout Notice – If you are going through a conversion event and there is a temporary restriction to access participant accounts of more than three consecutive days then the notice must go out at least 30 days, but not more than 60 days prior to the blackout. There are a few exceptions.

Notice of Investment or Fee Change – 30 to 90 days prior to the change taking place.

There are a few more however you get the idea. In addition to annual distribution, some of these notices must be provided to newly eligible employees on an ongoing basis. Notice requirements must be understood and managed correctly, and a plan sponsor should not just assume that this is all taken care of by vendors without a complete understanding of who is responsible and what safeguards are in place to make sure the requirements are met.

Finally, don’t forget about the requirement to give participants enough information and education to allow them to make informed decisions with regards to their investments.