When to issue a SMM

[Guest Bud]

We have an amendment that was adopted last year and is effective last year when we get a favorable determination letter. We don't expect the determination letter until later this year, which is way past the 210 days after the close of last year. Do we still have to furnish the SMM by the 210 day deadline even if we don't know whether it will be effective? Is there some rule that says a contingent amendment has not been adopted until the contingency has been met?

[Guest Bud]

Another question, can SMMs be posted?

[austin3515]

1) Yes, you still need to issue an SMM, but you would qualify it by saying something to the affect of "contingent upon approval by the IRS."

2) Yes you can post-it. BUT, that won't satisfy your obligation to distribute the SMM. It must be delivered to all participants.

You may want to post what the amendment actually was, as this may change my answer?

[Kirk Maldonado]

When you say post it, what do you mean? Would you be posting it on the company's intranet or on a bulletin board in a lunch room?

[Guest Bud]

Posting on the company's intranet and the 401k plan's intranet.

[austin3515]

I always thought the answer was no. Perhaps what Kirk is thinking is if you sent an email to everyone with the a link to the SMM?

Electronic delivery is acceptable if certain requirements are met, one of which I believe is that it must be offered in paper if requested (this is the rule for safe harbor notices, which I think was meant to be consistent with the DOL?)

[GBurns]

I had 2 clients who ran into trouble a few years ago by using email. They had assigned or registered email addresses for each employee quite some time before and thought that this would be a good delivery method. The problem turned out to be that very few of the employees had internet access either on the Intranet or on the Internet. The majority did not have access or ready access to a terminal at work (even if they remembered their access codes) and only 40% had internet access at home.

Luckily the problem came to light because of a notification regarding a voluntary product enrollment and while the problem was being addressed in walked the DoL.

These were large hospitals that are part of a large national chain.

So while it might in theory be a good idea, it might not be good in practice. To assume that employees will access the email might be incorrect. Delivery through a medium that has no proof of delivery or questionable proof of delivery might not be a good idea.

I would only use email if its use and effectiveness has been verified and documented. Even if used, it should not be the sole means.

[Kirk Maldonado]

The DOL has issued guidance on providing documents electronically. It could save you some time and money by disseminating the documents that way.

[Guest Bud]

Thank you very much

[E as in ERISA]

For participants whose use of computers is "integral" to their job, the electronic delivery rules are pretty easy. For others, you have to comply with the notice and consent rules. Those rules potentially require that the person consent in a way that "demonstrates" that they can receive the information in the electronic form that will be used. I've never quite understood how the person is expected to "demonstrate" that they can receive the info in a Word or pdf format.... I presume that it has to be more than just an e-mail consent?

If you can't meet the requirements, paper is required. And as noted above, participants can always request paper too.

http://www.benefitslink.com/erisaregs/fina...cdisclosure.pdf