Other than as provided in the SPD, is their a notification requirement with respect to Diversification Election opportunities? Is the Plan obligated to notify Qualified Participants and, if so, with what frequency?

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It is the position of the IRS that participants who become eligible for the ESOP diversification election under IRC Section 401(a)(28)(B) must be specifically notified regarding the amounts available for diversification and that provisions in the SPD (relating to diversification) are not sufficient for this purpose.

Is notification required during each year of elgibility, or only during the initial year of eligibility?

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Each participant eligible for the ESOP diversification election under IRC Section 401(a)(28)(B) should be notified during each year's 90-day election period of the amount available for diversification.

RLL, I have never seen any published authority by the IRS requiring notification in excess of the SPD requirement. Did you get oral advice on this point? This has always bothered me, can you point me to the authority if it exists.

IRS officials have expressed this view in a number of public forums, including the Annual Conferences of The ESOP Association.

I am with IMINSKY, I have never seen anything in writing that states that you must notify qualified participants. Our legal counsel even advised that it was not necessary. As a matter of courtesy we do it anyway each year.