Participant Communications/Notice Requirements

[Nassau]

My client (DC- 401(k) Plan) is re-enrolling their entire participant population into an age-appropriate target date fund, unless participants opt out. Dates are still being worked out, but we are tentatively looking at opening the opt-out window on 2/9, closing it on 2/27, and updating the planwide exchanges and allocation changes on 3/1.

QUESTION:

My question is about requirements for timing of participant communications/notices. If we notify participants on or about 2/9, is that sufficient notice? Or do we have to give them at least 30 days for 404© purposes, etc.?

[QDROphile]

Have you considered the applicability of the blackout notice rules?

[Lou S.]

I wouldn't feel comfortable unless participants had at least 30 days and no more than 90 days notice.

[BG5150]

So, with a 2/27 date, it's over a month and a half.

And you are NOT going to do the exchanges on 3/1. That's a Sunday.

[Lou S.]

BG, maybe I'm reading it wrong but I understood it that they we working out the details and were going to give information to participants on or about 2/9 and is they did that the OP wanted to know if a transfer date approximately 3 weeks later was good enough.

[GMK]

I wouldn't feel comfortable unless participants had at least 30 days

Agreed. There's still 3 weeks left in January. Any chance they can get the notices out yet this month?

[BG5150]

I thought they were going to tell everyone soon, and then start collecting the choices in the window.

I guess it wasn't clear.

If people are only informed on 2/9, then a 3/2 date will not work. Especially if they have been considering it longer than that.

[Kevin C]

If the plan sponsor wants the fiduciary protection normally afforded to plans using a QDIA, the timing requirements for the QDIA notice are in §2550.404c-5©(3). In this case, the applicable timing is "at least 30 days in advance of the date of any first investment in a qualified default investment alternative on behalf of a participant or beneficiary ..."