Sarbanes-Oxley Blackout Notice Issues

[Guest Jose Rosario]

I'm seeking any comments about any general issues that may have occurred concerning the implementation of an/or compliance with the SOA. I'd like to know if there are any known pitfalls or positives out there. Any input at all would be appreciated.

[Guest hank]

An issue we're looking at right now is whether some of our nonqualified top hat plans (which are individual account plans as defined in 3(34) of ERISA are subject to the DOL rule. The DOL rule is silent on the question and there is no direction provided in the preamble to the rule.

Any thoughts? Has anyone heard whether further guidance on the blackout rule may be forthcoming from DOL?

[Guest Jose Rosario]

Thanks for your reply, Hank. Bsed on a quick search of the message boards, it appears that yours is one of the more pressing concerns people have about the new regs. Attached below is a comment from "Katherine":

ERISA Section 101 requires a blackout notice. Regulations Section 2520.104-23 exempts "top hat" plans from the reporting and disclosure requirements of ERISA Sections 101 to 111.

But a top hat plan might not be exempt from some of the SEC requirements.

[Guest hank]

Our outside counsel has advised that the SEC rule (Reg BTR) clearly contemplates top hat plans within its definition of "individual account plan". The DOL reg, on the other hand, lacks such clarity. We've been advised that until further guidance is forthcoming from DOL, the cautious approach is to treat top hats as subject to the DOL rule and to provide the notice if and when a top hat "blackout period" (as defined in the DOL reg) is slated or occurs due to an emergency.

[Guest Jose Rosario]

Thanks again, Hank.

[Guest gaham]

In an ABA teleconference seminar yesterday, the DOL representative on the panel (Janet Walters) responded to this issue as follows: If the top hat plan has filed the one-time notice under Reg. Sec. 2520.104-23 (most top hat plans do this, otherwise they are subject to reporting requirements), it is NOT subject to the DOL blackout notice requirements. If it has not filed the one-time notice it IS subject to the DOL rules.

The rationale here is that the filing exempts the plan from the Title I reporting and disclosure requirements and the the SOA blackout notice requirements are part of these requirements.

The SEC representative, on the other hand, made it clear that top hat plans are subject to their rules whether it has filed the notice or not.