SMM for Amendment to Change Corp Trustee

Plan being amended to change corporate trustee.  Would you do an SMM or no?

Yes, I would.

I know I know.  It's a plan with over 1,000 people though.  How aggregious would it be not to send it??

I think a change in control of the assets of the trust is kind of a big deal.

Well, there's no CIVIL penalty as long as you provide it when requested by the participant, DOL, etc., etc. - however, if I recollect rightly, there is a potential CRIMINAL penalty under ERISA 501 if you WILLFULLY violate disclosure requirements.

No dispensation I know of for an international man of mystery...

Just being lazy I guess... And trying to save a tree on top of that (no one has an email...).

You've talked me into it.

I'll add that I actually think it is more confusing because it gives the impression something has changed when it reality nothing has changed.  Having one giant bank serve as trustee instead of another giant to me sounds like nothing.

Can you wait until the next SAR goes out and send it with that?

If a plan’s administrator uses a summary of material modifications (rather than a restated summary plan description), consider this logic path.

An SMM describes “any material modification to the plan and any change in the information required by section 102(b) of [ERISA] and § 2520.102-3 of these regulations to be included in the summary plan description[.]” 29 C.F.R. § 2520.104b-3(a) https://www.ecfr.gov/current/title-29/subtitle-B/chapter-XXV/subchapter-C/part-2520/section-2520.104b-3

The referred-to rule about the contents of a summary plan description requires “[t]he name, title and address of the principal place of business of each trustee of the plan[.]” 29 C.F.R. § 2520.102-3(h) https://www.ecfr.gov/current/title-29/subtitle-B/chapter-XXV/subchapter-C/part-2520/subpart-B/section-2520.102-3.

The need for a name and address follows the preceding requirement that an SPD or SMM include “a statement that service of legal process may be made upon a plan trustee or the plan administrator[.]” 29 C.F.R. § 2520.102-3(g).

Even if a change in trustee from one bank to another is innocuous and otherwise immaterial, the information is not idle. For some ERISA claims, a participant or beneficiary must sue the trustee, even if only so the court will have jurisdiction to order the trustee to do (or refrain from doing) something. And the plaintiff or her attorney needs to know where to send the process server.

About the timeline, the plan’s administrator may furnish its SMM as late as “210 days after the close of the plan year in which the modification or change was adopted.” 29 C.F.R. § 2520.104b-3(a).

Depending on when the plan’s sponsor adopted or adopts a cycle 3 restatement, is there an opportunity to integrate the trustee information with an SPD or SMM used to meet other disclosure needs?

Also, has the plan’s administrator considered electronic disclosures for those who affirmatively consent, are required to use electronic communications as an “integral part” of the employee’s work, or furnished (or were assigned) an electronic address and did not opt out of an electronic-disclosure regime?

Well it's funny you say that because it occurred to me separately that they are actually going to be going through a conversion later this year and we should be able to double up with the notices for that.  Thanks BG!

We did the Cyle 3 last year.  And by the way Peter, if someone was going to sue a client, my assumption is they would have the decency to ask me for the most recent plan documents.  It's the least they could do if they're going to put us to all that trouble! 

I mentioned the service-of-process point because it was a part of the Labor department's reasoning in the 1977 rulemaking.

Trust me I know, really was just being lazy 😂