Addition of investment alternative - advance notice requirement?

Suppose a plan that is participant directed merely adds another mutual fund as available. Doesn't change any of the alternatives already available. Is there a 30 day advance notice requirement before the new mutual fund can be available? 

If an ERISA-governed retirement plan provides participant-directed investment, the 404a-5 rule specifies three kinds of information changes that call for 30 days’ notice “unless the inability to provide such advance notice is due to events that were unforeseeable or circumstances beyond the control of the plan administrator[.]”

29 C.F.R. § 2550.404a-5 https://www.ecfr.gov/current/title-29/subtitle-B/chapter-XXV/subchapter-F/part-2550/section-2550.404a-5#p-2550.404a-5(b)

Often, recordkeepers trot out this rule—even when it doesn’t apply. An unadvised plan administrator just falls in with what its recordkeeper says.

Further, many service providers’ agreements require notice (often, 60 days) to the service provider before it has an obligation to provide a service regarding an investment-related change. A plan sponsor or consultant with purchasing power can negotiate the notice period and which circumstances invoke it; others are stuck with a rack provision.

Peter, wouldn't the addition of a fund be "An identification of any designated investment alternatives offered under the plan" under 29 CFR sec. 2550.404a-5(c)(1)(i)(D)?

Yes, adding an investment alternative usually requires an advance notice under ERISA’s 404a-5 rule.

My point was not that adding an investment alternative would not call for such an advance notice.

Rather, my point is that many recordkeepers set practical requirements beyond what ERISA’s 404a-5 rule might require for a plan’s administrator to meet its fiduciary responsibility to communicate to participants and beneficiaries.

An agreement might condition a service on a notice to the plan’s participants and beneficiaries, even in circumstances for which ERISA’s 404a-5 rule might not require an advance notice. Further, an agreement might condition a service on more days’ notice—at least to the recordkeeper—than the 30 days’ notice the 404a-5 rule calls for.

When responding to questions about how quickly or easily a plan’s administrator may change or add an investment alternative, it’s often efficient to look to the recordkeeper’s service agreement.