Blackout Notice & individual accounts

[Guest jim williams]

If a plan consists of pooled investment accounts for which the participants can direct which funds their contributions are invested, would this arrangement be considered "individual accounts" subject to the Blackout Notice requirements?

[Brian Gallagher]

Can the people exchange money from one investment to another? Will they be restricted from accessing their money they might otherwise have been able to do? Some examples: loans, hardships, distributions.

If they cannont touch money that ordinarily they could, then the notice would apply.

[this is just an educated guess...I usually err on the side of caution]

[Guest jim williams]

Their access would be restricted with regards to exchanges, loans, etc but such restrictions would apply to any plan regardless if it is a pooled account or individually self-directed when there is a change in recordkeeper. However, it is my understanding that pooled accounts are not subject to the Blackout notice.

[Guest Pensions in Paradise]

Sorry, I'm a little confused. How can it be a pooled account if the participants can direct the investment of their accounts?

[TBob]

I think the pooled accounts that you are referring to that are not subject to the notice requirements are plan accounts that don't allow for participant direction of the investments. Generally, an investment manager invests the entire plan as one pool and the participants have no say in the investment process. In my experience, these types of plans are more often than not operated in a "Balance Forward" environment.

Since the participants do not have the ability to direct these types of accounts, they won't be missing this ability anyway so why give them a notice.

You mentioned above that the participants could direct their investments to the fund of their choice in the pooled account. It sounds like you will be taking away this ability during the blackout period and they need to receive a notice because of this.

Remember that the notice is also required when the participants are restricted from their abilities (as Brian mentioned) to access their accounts for other reasons like distributions, loans, etc.

[Guest rmeigs]

Think of the "pooled investment accounts" as if they were mutual funds. If the plan participants have the ability to direct how their contributions are allocated between these "funds" and you are going to restrict that ability for a period of time, then the plan is subject to the Blackout Notice requirements -- IMHO.