Ensuring Participants Receive Important Plan Information

Why Participant Notices are Important

It’s important to keep employees informed about their retirement account. Making sure they are furnished or have access to all the documents and notices to which they’re entitled under the plan is a principal part of what we do here at Guideline. Being able to efficiently distribute plan information to participants enables us to make our services available at a competitive price and reduces paper waste. In order to accomplish this, we must maintain accurate employee contact information, including physical and email addresses at all times.

The Department of Labor and the IRS require documents and notices or other disclosures to be furnished to eligible employees or plan participants, whether currently active or dismissed, when certain events occur. When a document or notice is required, Guideline will furnish the notice to participants so long as we have accurate contact information. 

In the event that Guideline does not have accurate participant contact information, we rely on the plan sponsor to distribute important notices to participants.

Electronic Communications

As a part of Guideline’s service commitment to our clients, Guideline will furnish all required plan information and notices to participants so long as the plan sponsor provides an accurate email address, and the participant consents to electronic disclosure. If employees do not have an email account and routine access to a computer as a part of their job, Guideline requires the sponsor to ensure that a personal or company-issued email account is set up, as well as computer and internet access. 

Responsibility for Distributing Notices to Participants with Outdated Contact Information

It is common industry practice for service providers to require plan sponsors to furnish required notices. If a plan sponsor is unable to provide Guideline with accurate contact information for an employee, or if a participant has chosen to opt-out of electronic communications, the responsibility to provide appropriate disclosures or notices will fall to the plan sponsor. 

Copies of required notices will be posted to the plan sponsor for distribution in your Resource Library. The sponsor may choose to distribute the notices by mail, email (only if the participant has consented to use of their personal email), or any other means that will ensure the participant will receive the information. If a notice is emailed, the employee should always be advised that he or she may request a hard copy of any notice without charge. A plan sponsor should provide a hard copy upon participant request.

If a sponsor is able to obtain updated information for a participant, that information should be updated in your Guideline Roster, which may be accessed here. This will aid Guideline in directly distributing future notices to participants rather than relying on the plan sponsor for distribution.

What Events Require Participant Notices?

Generally, participants must be notified when a plan terminates, or sponsor or administrator information changes. Employees must also receive initial and recurring notices when they become eligible to participate. Employees who are no longer employed with the company but who were eligible to participate during a given period or have open accounts in the plan must also receive notices in many cases. Examples of the notices and disclosures Guideline provides include:

  • Amended Summary Plan Description
  • Plan information
  • Enrollment information
  • Beneficiary forms
  • Distribution information
  • Fee disclosure
  • Automatic enrollment notice
  • Safe Harbor Notice
  • Blackout Notice
  • QDIA Notice
  • 404(c) Notice
  • Plan Termination Notice
  • Summary of the plan’s annual financial report 

It’s important that participants receive these documents and notices when required. Guideline will either email or post these documents and notices on participant dashboards as long as we have accurate email addresses for them on file. 

Consequences for Missed Notices

If documents and notices are not distributed timely, penalties may accrue. Penalties vary based on the type of document or notice that was not distributed but can be as much as $100 per participant per day for a tardy blackout notice, for example. Thus, it is important that plan sponsors make their best effort to distribute notices provided by Guideline to participants for whom Guideline lacks information.   

Learn more about notice requirements on the IRS website. Information about correcting plan operational errors may also be found on the IRS website.

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