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The Timing of Routine 401(k) Notices That Must Be Given to Plan Participants

While the end of the year usually means holiday parties and wrapping up the books for the year, it also means that a variety of mandatory benefit notices are due to be distributed to your current employees as well as some of your former employees.  In today’s Blog, we are going to focus on notices with regard to your 401(k) retirement plan, but do not lose sight of any other requirements for additional benefit programs that you may sponsor.

  • The QDIA, Qualified Default Investment Alternative Notice, is to be distributed by December 1st to all current plan participants and eligible but non-participating employees.  This is NOT required to be given to terminated participants with an active account balance.
  • The Safe Harbor Notice, if you declare one, must be delivered no later than December 1st to all current plan participants and eligible but non-participating employees.
  • The 404(a)(5) Fee Disclosure is required to be delivered annually to all current plan participants and any employees that are eligible and not participating in the plan.  We suggest that you distribute this disclosure with the QDIA and Safe Harbor Notices due out by December 1st.  For terminated participants who maintain a balance in the plan, the 404(a)(5) Fee Disclosure must be sent to the last known address on record. This notice must also be provided to new eligible participants before the date they begin to direct their investments.
  • Plans with Auto Enrollment require an Annual Notice be distributed to ALL employees. We suggest that you distribute this notice on December 1st along with your QDIA Notice, 404(a)(5) Notice and your Safe Harbor Notice, if your plan is a Safe Harbor Election.  You are also required to provide this notice to new employees upon date of hire and again at least 30 days but no more than 90 days prior to enrollment into the plan. 
  • The Summary Plan Description is required to be delivered to all plan participants.  You, as the plan sponsor, is required for maintaining proof that they were received by your participants.   This is something that the Department of Labor could request in an audit.
  • A Summary Annual Report (SAR) must be distributed to all plan participants including any terminated participants that maintain a balance in the plan.  This report is prepared by the Third Party Administrator and sent to you with your 5500 for distribution, which needs to be distributed within 30 days.

In addition to these notices, plan sponsors are required to perform other basic routine tasks to ensure compliance of their 401(k) plan. If you have questions about any of these notices, or your plan in general, please feel free to contact me at 775-674-6000.

Greg Jacobs is the Executive Vice President of Hendricks & Associates, Inc. Insurance Broker / Investment Advisor Representative

Financial Advisors and Registered Representatives associated with Hendricks & Associates, Inc. offer advisory services through Securities America Advisors, Inc. and offer securities through Securities America, Inc., member FINRA/SIPC

Hendricks & Associates, Inc. is not an affiliated entity of the Securities America companies.

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