Rights to Plan documents

[Gary]

Are participants in 401k plans entitled to the rights under ERISA 104(B) as pension participants? That is can they request all plan documents of the Plan?

And how does an individual review their account balance to ensure that it is accurate, when they leave or during employment?

[Guest]

ugh, this sounds like a question from the ASPA C-1 exam.

from the Pension Answer Book,

upon request, other documents MUST be furnished to the participant, including

the plan instrument and the trust instrument.

A reasonable charge (not to exceed 25 cents / page may be imposed.) You actually have 30 days to provide the documents or fines may be imposed.

Let's see, if the document is 60 pages long, that's $15 the participant could be charged.

How does anyone review their account balance - regardless of whether they leave or not? I get a monthly statement from the bank on my savings account. How do I know the interest I was credited is the same as everyone else? You don't do you?

[Guest [Pat M]]

Wouldn't it be nice if sponsors just put all .pdfs of the docs on their intranets, if available? Initially, I realize there would be flood of questions, just as when any new info is suddenly available. But the activity usually dies down, once new info is "old hat."

FYI- you get 10 free .pdfs from adobe if you want them. www.adobe.com

Also, when Benmgr, I handed out (with enrollment kit) some examples of how to read statements and tie total quarterly contributions to pay stubbs. It prevented a lot of questions later about timing of contributions.

[IRC401]

One of the excuses that my former employer had for not wanting to give out the plan document was that the HR people didn't want employees asking for explanations of what the document meant. Even though I gave tax advice on retirement plans for a living, they were afraid that I was going to ask for an explanation of the top-heavy rules for a plan that covered thousands of employees. [They did send me a copy of the plan.]

[Guest]

As a participant in the plan you are entitled to receive a copy of the plan and trust documents, upon your request, as indicated by Tom.

Depending on the type of investments and whether or not the plan is daily valued, you might be able to pretty much track your investments using the Internet. For example, I had investments with my previous employer that were through Vanguard. I used their website to download all transactions that occurred in my account and uploaded it into Quicken. I was then able to update prices daily and basically keep track of all the activity in my account.

If your plan is uses traditional balance forward accounting, you will have a more difficult time of tracking this. But, you have a right as a participant to know when and how deposits were made to your account and how interest and earnings were allocated. As Tom suggested, you may have to pay for the service provider to give you this information, but you are entitled to review the information is you so choose.

[pjkoehler]

Aside from that documents and written information the administrator of a 401(k) plan covered by ERISA Title I must furnish participants and beneficiaries automatically, the administrator is required to furnish them, within 30 days of receiving a written request, additional copies of the SPD and the SAR, as well as the "instruments under which the plan is established or operated." ERISA Sec. 104(a)(6). Courts have concluded that such instruments include the plan document, minutes of the meetings of the board of trustees, investment committee, administrative committee, etc., to the extent they bear upon the continued maintenance of the plan or its operation, but do not include participant address lists or records that would divulge purely confidential information about persons unrelated to the requesting party. Furthermore, ERISA authorizes a court, in its discretion, to impose a civil penalty on the plan administrator who fails to provide the requested information within the 30-day period up to $100 per day (not to exceed $1,000 per request). ERISA Sec. 501©(6).

So long as a participant has a colorable claim that he is entitled to additional benefits under the plan, he remains a "participant" for purposes of ERISA's enformcement provisions and is entitled to due process under the plan's claims procedure. Thus, a participant may dispute the computation of his account balance even after he has terminated employment and received a lump sum distribution. A request for recomputation submitted to the plan administrator should be treated as any claim for benefits. There is a long line of cases in which employers discovered to their shock and amazement that a former employee who had received a lump sum distribution from the plan on termination and subsequently requested plan documents in order to check the computation of his benefit, was still a "participant," and, therefore, entitled to receive those documents.

[This message has been edited by PJK (edited 04-18-2000).]

[BFree]

Is there something comparable to an annual statement that I may request for a DB plan?

[AndyH]

BFree, you have the right to a statement of your accrued benefit, not more than once per year. That's the equivalent of a 401(k) statement.

You could of course request anything else, including backup information, but I'm not sure the sponsor is required by ERISA to provide it. Maybe so, but I don't know of such a requirement.

[Tom Poje]

without looking it up, I think you can ask for anything reasonable, including the plan document, but you can be billed for the extra stuff...eg. copying costs and whatever else.

[Moe Howard]

What about this ......

Is a participant entitled to have a copy of the "service contract" between the PLAN & the plan's registered investment advisor (RIA) ?

[RCK]

Referring back to PJK's response, I believe that the answer to Moe Howard's question is "yes". I would make them ask specifically for that document, and woudl not automatically volunteer it.

It is well known that the sponsor can charge the participant reasonable copying costs. But NOTE that the alternative is that the sponsor has to make it available for their review at any geographically convenient site that has some minimal number of employees--I think that it was 25.

RCK

[Kirk Maldonado]

The applicable regulations provide that the "documents shall be made available for examination in the principal office of the employer and at each employer establishment in which at least 50 participants covered under a plan are customarily working."

[BFree]

AndyH - you say that I have a right to a statement of my accrued benefit. I am a terminated participant, can I assume that my accrued benefit will not change?

(This is a DB plan. I terminated several years ago and received an accrued benefit statment. Payments begin about 30 years from now).

Thanks.

[AndyH]

Yes. It cannot go down. It is highly unlikely to go up.