Plan Sponsors: Don’t Forget Those Annual Plan Notices
Plan Sponsors: Don’t Forget Those Annual Plan Notices. The 2017 plan year is winding down, so it’s a good time for defined contribution plan sponsors to look ahead and determine which notices you may be required to provide to participants before the 2018 plan year begins.
If your plan includes certain provisions, you may be required under current regulations to send specific annual notices. These are in addition to the typical initial notices you’re required to send to newly eligible participants. Specifically, if your plan includes safe harbor provisions, features like automatic enrollment and/or automatic contribution escalation, or if it includes an automatic default investment option for participant contributions (known as a qualified default investment alternative (QDIA)), you may need to send some annual notices to your participants.
Prudential Retirement recently issued a comprehensive compliance bulletin that details which annual notices are required depending on the features in your plan. The bulletin also summarizes the timing, recipients, contents and delivery method. Some of the annual notices may be sent together in a single mailing; however, some plan designs may require that each notice is mailed separately.
Plan sponsors should consult with their record keeper, administrator and advisor as appropriate to determine which annual notices are required, when and what to send, how to send it, and to whom. It’s important to pay careful attention to the requirements to ensure your plan remains in compliance. Plan sponsors also need to make sure that participants are notified in a timely manner about the plan’s provisions and how their contributions, accounts, and assets may be impacted.
The Prudential bulletin linked in this article may help facilitate conversations with your providers, as well as help you determine which annual notices you may be required to send. As a plan sponsor, part of your fiduciary responsibility is to ensure your participants are notified about certain plan provisions and features in line with existing regulations. As such, it’s important to proactively determine what notices you need to send and when they need to be mailed well in advance of the start of the new plan year.
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