401(k) black out notices

[Guest susa]

We have a balance forward 401(k) plan that has company stock. Participants are allowed to change investment allocations quarterly which is clearly spelled out in the SPD. Am I understanding the new rules correctly that they would not have to provide any black-out notices?

[E as in ERISA]

Blackout notices are not required for scheduled temporary suspensions that are disclosed to participants in the SPD.

[Guest rmeigs]

Generally, plan administrators impose blackout periods to ensure proper accounting and record transfer upon a change in plan recordkeepers, trustees or other service providers, or a corporate transaction, such as a merger, that impacts the coverage of groups of participants under a plan. These are the type of blackout periods in which notice must be given.

It is my understanding that a blackout notice is not required for:

1) regularly scheduled blackouts (e.g., daily trading limits or quarterly freezes coinciding with the release of the company’s earnings reports) that have been properly disclosed to participants through summary plan descriptions or certain other plan communications.

2) permanent restrictions or elimination of rights (e.g., the halting of new contributions to an investment option, replacement of one investment option with another of a similar type, or plan termination).

There are two other circumstances under which the notice requirement does not apply:

1) when deferring the blackout period for 30 days after giving the notice would violate ERISA’s fiduciary standards (e.g., if the plan fiduciary immediately suspends investment in employer stock because the employer has filed for bankruptcy)

2) when the events prompting the blackout were unforeseeable or beyond the plan administrator’s control.

Someone correct me if I’m wrong on this.

[Lynn Campbell]

Would this be a blackout?

Participants have new investment choices as of 4/1/2003. All the old investments are replaced by the new ones. Their old money is moved to the new investments as soon as possible after 3/31/2003 - once the account balances of each person as of 3/31/2003 have been computed. This is a quarterly-valued plan.

Would the answer change if the old funds were all liquidated as of 3/31/2003 and put in a money market account pending calculation of the 3/31/03 account balances- and then moved to the new investment options?

Thanks for all input.