Adding New Investment Options; Eliminating others

[Guest Kennedy]

My organization administers approximately 500 401(k) plans with participant directed investments. We are planning to change the investment options on 4-1-2000. New options will be added and some will be eliminated. Can anyone offer suggestions on the timeline for notification and the types of notices that should be provided to our participants?

I know that this must be a fairly common practice, but I have been unable to locate any authoritative written guidance. Any references would be very much appreciated.

[M R Bernardin]

You may want to take a look at the Frost and Aetna advisory opinions issued by the Department of Labor back in 1997.

The Aetna opinion is at http://www.dol.gov/dol/pwba/public/program...ry97/97-16a.htm

the Frost opinion is at http://www.dol.gov/dol/pwba/public/program...ry97/97-15a.htm

[This message has been edited by Dave Baker (edited 10-13-1999).]

[Guest John McCrary]

In the past, what I did was send a notice of the change and info about the new funds in the quarter end statemnts ( if the change is 4/1 - send out with 12/31 statements ) and held employee meetings to explain the new funds and had them fill out new election forms. It was alot of work, but generaaly went smooth.

[Guest fridayt]

We have helped many firms change, add, or delete funds from the investment lineup. If you are interested in discussing the operational and financial impact of doing this, feel free to contact me via e-mail and we can discuss these additional issues that need to be considered whenever a change like this occurs. T. Friday

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