Enrollment Material Deadlines & MDOs - What are the regs?

Hi all,

A participant satisfies the eligibility requirements of 21 and 3 months in August 2025. Because of a mix-up at the Plan Sponsor HR's department, they were not provided enrollment materials (SPD & Annual Notice) at that time. This seems to constitute an MDO, with necessary corrections outlined in EPCRS.

What if the participant received the enrollment materials well advance of their entry date, say on their date of hire in May. My recollection is that this is permissible, but I know certain other items have a 'reasonable period' defined with 'no fewer than 30 no more than 90 days prior' language. If this is permissible, would this no longer constitute an MDO since the participant received enrollment materials and could have made a deferral election on the Plan's website at any time?

Hoping someone can direct me to the governing regs themselves. Appreciate y'all!

OrderOfOps, you might not have described enough about the plan’s provisions to get helpful responses. For example:

Does the plan provide or omit an automatic-contribution regime?

Does the employer rely on one or more safe-harbor constructs to meet coverage, nondiscrimination, and top-heavy conditions?

Also, consider that at least one perhaps relevant standard is this:

“Whether an employee has an effective opportunity [“to make (or change) a cash or deferred election at least once during each plan year”] is determined based on all the relevant facts and circumstances, including the adequacy of notice of the availability of the election, the period of time during which an election may be made, and any other conditions on elections. 26 C.F.R. § 1.401(k)-1(e)(2)(ii) https://www.ecfr.gov/current/title-26/part-1/section-1.401(k)-1#p-1.401(k)-1(e)(2)(ii).

I’m unaware of a court decision that analyzes whether delivery of a summary plan description is or might be adequate notice of a participant’s opportunity to elect § 401(k) deferrals.

This is not advice to anyone.

Hi Peter,

Thanks for the response. The Plan does not have any ACA provisions, does employ an enhanced SHM to meet ADP/ACP testing.

Was the safe-harbor notice included in the summary plan description?

If so, was that communication “provided within a reasonable period before the beginning of the plan year (or, in the year an employee becomes eligible, within a reasonable period before the employee becomes eligible)”?

While there is a period the Treasury’s rule deems reasonable, “whether a notice satisfies the timing requirement . . . is based on all of the relevant facts and circumstances.”

26 C.F.R. § 1.401(k)-3(d)(3)(i) https://www.ecfr.gov/current/title-26/part-1/section-1.401(k)-3#p-1.401(k)-3(d)(3)(i).

A plan’s administrator might want its lawyer’s advice about what is or isn’t a reasonable notice.

Further, that a condition for a safe-harbor treatment was not met does not necessarily mean that a participant lacked an “effective opportunity” to make her § 401(k) election.

A plan’s administrator might want its lawyer’s advice about what is or isn’t an effective opportunity.

This is not advice to anyone.