Providing a prospectus as required under 404(c)

[katieinny]

I'm wondering how some of you deal with providing a prospectus in a timely fashion when participants have the ability to change their investments on-line, and neither the Plan Administrator nor the Investment Advisor knows when a participant has made such a change. Large plans that offer a multitude of investment options to hundreds of people couldn't provide a prospectus for every investment to every participant.

I know that some investment managers simply say that all prospectuses are available on-line. Has the DOL ever differentiated between the requirement to "provide" a prospectus vs. "making one available?"

[Jon Chambers]

I'm wondering how some of you deal with providing a prospectus in a timely fashion when participants have the ability to change their investments on-line, and neither the Plan Administrator nor the Investment Advisor knows when a participant has made such a change. Large plans that offer a multitude of investment options to hundreds of people couldn't provide a prospectus for every investment to every participant.

I know that some investment managers simply say that all prospectuses are available on-line. Has the DOL ever differentiated between the requirement to "provide" a prospectus vs. "making one available?"

I don't believe that simply "making the prospectus available" gets you 404© protection. Some vendors try to finesse the requirement by providing the prospectus online, and having the participant check a toggle box indicating that they have reviewed the prospectus prior to completing any trade. I recommend that my clients distribute all prospectuses to all participants at least annually. This may be overkill, but it's a good way to comply with the information dissemination requirements of 404©.

Hope this helps,

Jon