(b)lines Ask the Experts – Ongoing Notice Requirements

“In addition to the annual distribution of these notices are there any ongoing notice requirements? Do I need to provide some or all of these notices to new hires?”    

Michael A. Webb, vice president, Cammack Retirement Group, answers:

This is an excellent question, since many plan sponsors diligently follow annual reporting and disclosure requirements, but forget that certain notices also require distribution throughout the year, and not just on one specific date. Some good examples of these requirements relate to all of the notices you describe.

For the qualified default investment alternative (QDIA), though the annual notice must be provided to all plan participants by December 2, there is also an initial notice requirement for new participants. For those individuals a QDIA notice must be delivered on or before the date of plan eligibility. For plans that provide for immediate eligibility to make deferral elections (e.g. most 403(b) plans) the notice must be delivered to new hires by their date of hire.

There is a similar requirement for the ADP/ACP nondiscrimination testing safe harbor plan notice, though in the case of immediate eligibility the notice may be provided as soon as practicable following date of hire. The same requirement applies to automatic enrollment notices (for both eligible automatic contribution arrangements (EACAs) and qualified automatic contribution arrangements (QACAs)). Other common notices that require distribution to newly eligible employee throughout the year include the 404(a)(5) participant fee disclosure notice as well as the Summary Plan Description.

Finally, we should mention that the Experts continue to see an erroneous distribution deadline of December 2 and not December 1, for such notices listed in some publications. For a discussion of why the December 2 deadline is indeed correct, see this Ask the Experts article from our archives.   

Thanks again for your timely question!