404a Participant Disclosures

[austin3515]

How are people handling the DOL's blatantly incorrect interpretation that these disclosures go to everyone eligible, without regard to whether or not they have a balance in the Plan? Is anyone going to say "although contrary to the DOL's interpretation, one reasonable interpreation of the rule is that individuals without an account balance have no right to make investment elections."

How is that not a reasonable interpretation?? I'm thinking of one plan with 200 eliglbes and 40 with account balances, adn wondering how I tell them with a straight face that by law they are required to send this to the 160 non-contributors?

[Bill Presson]

How are people handling the DOL's blatantly incorrect interpretation that these disclosures go to everyone eligible, without regard to whether or not they have a balance in the Plan? Is anyone going to say "although contrary to the DOL's interpretation, one reasonable interpreation of the rule is that individuals without an account balance have no right to make investment elections."

How is that not a reasonable interpretation?? I'm thinking of one plan with 200 eliglbes and 40 with account balances, adn wondering how I tell them with a straight face that by law they are required to send this to the 160 non-contributors?

So if I join the plan on July 1, but choose not to defer at that time, I don't have the right to the information so I can make a choice to defer later? Like October 1?

[austin3515]

Sample welcome letter.

Bill, congratuluations! You are now eligible for the We Won't Waste Paper 401(k) Plan! Here is your enrollment kit with ALL of the ifnormation you could ever hope for on all of the investments we have to offer. Questions? Please ask!

Don't want to sign up right now? No problem! Just call me when you're ready to contribute and I'll get you all this information a secodn time. But until then, each year, you'll only receiving from me the Safe HArbor Notice and the Summary Annual Report each year. I'm not going to give you the 20 page notice each year with all of the fund information, because I can't imagine what use that would be to you since you decided not to contribute, and more likely than not will never contribute. Of course if you do have even $100 in the Plan, I will gladly send you the 20 page notice, so your children can make paper airplanes out of it.

Sincerely,

Director of Conservation

[12AX7]

There was intention to deliver the disclosures electronically, but that process has gotten out of hand as well.

However, on this topic, how do the disclosure exemptions for owner only plans work? For example:

1 Owner

1 Owner and Spouse

2 Owners (incorporated)

Law Firm with 10 partners, but not every partner is a 5% Owner

Do the exceptions apply in each of these examples?

[austin3515]

There was intention to deliver the disclosures electronically,

Right, because a) everyone has an email address and b) every employer knows every employee's email address.

I'm sure the DOL has a wonderful email system. John Doe Fast Chain - not so much.

[jeff77]

With the implementation of EFAST2 and the requirement to file electronically I guess the DOL assumes that everyone needs to have a computer and email address

[Bill Presson]

Sample welcome letter.

Bill, congratuluations! You are now eligible for the We Won't Waste Paper 401(k) Plan! Here is your enrollment kit with ALL of the ifnormation you could ever hope for on all of the investments we have to offer. Questions? Please ask!

Don't want to sign up right now? No problem! Just call me when you're ready to contribute and I'll get you all this information a secodn time. But until then, each year, you'll only receiving from me the Safe HArbor Notice and the Summary Annual Report each year. I'm not going to give you the 20 page notice each year with all of the fund information, because I can't imagine what use that would be to you since you decided not to contribute, and more likely than not will never contribute. Of course if you do have even $100 in the Plan, I will gladly send you the 20 page notice, so your children can make paper airplanes out of it.

Sincerely,

Director of Conservation

Don't get me wrong....not saying I like it at all. And the expanded Safe Harbor Notice is enough of a pain each year.

[DMcGovern]

"I guess the DOL assumes that everyone needs to have a computer and email address"

You are correct - and don't forget what "assuming" does!

I wish they would stop and consider the vast differences these regulations have on large plans vs. small plans. Most of our clients are smaller companies - the people that sponsor and administer the plans are so busy just trying to keep their company afloat right now. Dealing with all of the changes for their benefit programs (including all the health care regulations) is quite overwhelming for them.

[Guest benji]

How are people handling the DOL's blatantly incorrect interpretation that these disclosures go to everyone eligible, without regard to whether or not they have a balance in the Plan? Is anyone going to say "although contrary to the DOL's interpretation, one reasonable interpreation of the rule is that individuals without an account balance have no right to make investment elections."

How is that not a reasonable interpretation?? I'm thinking of one plan with 200 eliglbes and 40 with account balances, adn wondering how I tell them with a straight face that by law they are required to send this to the 160 non-contributors?

FDbrochure_proof.pdf

[austin3515]

Why was this attached? Was my question addressed somewhere?