Proof of Safe Harbor Notice

[nancy]

I was referred a plan sponsor whose 401(k) plan  is under audit.  The IRS agent is requiring proof that the Safe Harbor Notices were issued.  Other than email, what type of proof are other TPAs recommending to clients?  The agent actually called all the employees for the last 4 years to ask if they received the notice!

[Bird]

Good grief.  Is it a match or NE?  I'd give a copy of the notice and state that it was handed out.  I wouldn't be too worried about it; can't imagine what they would do.  I mean, I guess if you have a SH match and it's not being used then maybe there would be concern.  If they called the employees then why do they need proof?  Or did the employees say "no?"  

[C. B. Zeller]

I agree with Bird. It sounds like the agent is on a fishing expedition. The sponsor is not required to retain proof that the notices were handed out. I would tell the agent that the notices were delivered by hand (or however they give them out) on approximately whatever date and leave it at that.

[nancy]

The sponsor did tell them that they were delivered by hand and provided all the notices.  That was not acceptable to the agent.  It is a safe harbor match.  They are taking them to CAP over this (with threat of disqualification).   Of course, the former employees did not remember if they got the notice.  One former employee did have a copy of what she received.

SInce I am just now getting involved in this situation, I hope there is not information that is being withheld.

[RatherBeGolfing]

There has got to be more to this...

[Remote Kathleen]

When I send out the safe harbor notices for each plan to our clients, I have a section on the cover letter with each participant's name and a space where they can initial (these are all small plans).  The clients return the letter to me after everyone has signed.  It's already been helpful on one occasion where a participant tried to claim they were not aware of a plan provision. 

[Peter Gulia]

Although it won't help for what was done in the past, government agency requests of the kind nancy describes are another reason plan administrators might consider the new electronic disclosure opportunities, including with employees who become former employees.  The computers make lots of records.