Important Notices
By Anthony L. Scialabba IV, Esq., QKA
Participant Fee Disclosure
What is it?
A participant fee disclosure (“disclosure”) depicts information with regard to the fees that are deducted at the plan and individual levels. This allows participants to better understand how much money they are paying for administration of the plan.
Who needs to receive it?
The disclosure must be supplied to all of the employees who are eligible to participate in the plan.
When must it be distributed?
It must be given at least once in any 14-month period. If any of the disclosure’s required information changes, each participant and beneficiary must be provided a description of such change at least 30 days (but not more than 90 days) in advance of the effective date of such change.
Qualified Default Investment Alternative
What is it?
A qualified default investment alternative (“QDIA”) notice indicates what a plan’s qualified default investment alternative is, the features pertaining to it, and explains an employee’s rights under the plan to select how her or his contributions will be invested and what occurs if no selection is made. Further, the QDIA notice explains an employee’s right to transfer assets which are invested in the QDIA to other plan investments (and where to acquire details about alternative plan investments).
Who needs to receive it?
The QDIA notice must be furnished to employees, former employees with account balances, and beneficiaries.
When must it be distributed?
The period is: before (1) they are eligible to participate in the plan or (2) the first investment in a QDIA is made on their behalf or on or before the date of eligibility if they have the opportunity to withdraw investments from the QDIA within 90 days of the first deposit. In addition, they must receive a QDIA notice within at least 30 days before the start of each plan year.
Safe Harbor 401(k) Plan Notice
What is it?
A safe harbor 401(k) plan notice (“notice”) provides eligible employees with information on whether the employer will make matching or non-elective contributions, how to make salary deferral elections, and other important features with respect to the plan.
Who needs to receive it?
The notices are required to be sent to eligible employees of the plan.
When must it be distributed?
The notices must be sent by: (1) at least 30 days (and no more than 90 days) before the beginning of each plan year or (2) in the year an employee becomes eligible, generally no earlier than 90 days before the employee becomes eligible and no later than the eligibility date.
Summary Annual Report
What is it?
A summary annual report (“SAR”) offers a summary of the financial details in the Form 5500 and includes a statement of the right to receive an annual report.
Who needs to receive it?
The SAR must be provided to all plan participants and each beneficiary who is receiving benefits under the plan.
When must it be distributed?
The SAR must be distributed within nine months after the close of the plan year. If an extension has been filed to extend the due date for the Form 5500, then the SAR is due within two months after the close of the period for which the extension was permitted.
Summary Plan Description
What is it?
A summary plan description (“SPD”) details the features of the plan and how the plan operates. In addition, the SPD supplies information on when an employee can start participation in the plan and how to file a claim for benefits.
Who needs to receive it?
All eligible employees are entitled to receive the SPD.
When must it be distributed?
For a new plan, the SPD must be distributed within 120 days after the plan becomes subject to the reporting and disclosure requirements of the Employee Retirement Income Security Act of 1974, as amended. For an updated, modified, or restated plan, the SPD must be distributed within 210 days after the close of the plan year in which the change, modification, or restatement was adopted. For newly-covered participants, the SPD must be distributed within 90 days after the participant first becomes covered under the plan.