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404(c) disclosures


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A client is being told that a 404© disclosure must be distributed annually. I don't think this is technically correct.

I hasten to say that I can see how procedurally, this might be done routinely, since the 404a-5 disclosures go out routinely anyway, and QDIA disclosures go out anyway, so it may just be easier to throw every disclosure into one document or package. But I don't think the 404© disclosure itself, separate from the otherwise required items, is an annual REQUIREMENT.

Am I missing something?

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I tend to agree with you, but I have also heard some promoters make a similar claim. That said, I have also been told that all plan sponsors should "protect themselves" with a "316 fiduciary"...

I think it depends on what you mean by 404© disclosure. The plan has to disclose to the participants that the plan is intended to be 404© compliant and will not be responsible for investment losses. This is normally disclosed in the SPD but would not be an annual requirement. I guess you could call the QDIA and 404a disclosures part of the overall disclosures you need in order to satisfy 404©, thereby imposing an annual requirement.

 

 

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I guess you could call the QDIA and 404a disclosures part of the overall disclosures you need in order to satisfy 404©, thereby imposing an annual requirement.

I think that is what is going on; the 404a fee disclosures are really requirements under 404©.

And if we're being picky, why do you keep calling it 404©? Is it copyrighted or something? :)

Ed Snyder

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