If your business or organization offers a sponsored individual retirement savings plan, such as a 401(k) or 403(b), you may be familiar with the U.S. Department of Labor’s requirement that plan participants and beneficiaries be notified annually about investment-related information and activities. The first such notification was to be delivered by August 30, 2012, with subsequent notices being distributed no longer than 12 months later. That means the deadline for the 2013 notice is approaching rapidly.
But hold on. The Department of Labor, responding to complaints that an end-of-summer deadline had no correlation with any other plan reporting or disclosure requirement, has decided to allow a “one time exception” to the 12-month reporting rule. Sponsoring companies may take up to 18 months from the date of distribution of the prior notice to issue the next disclosure statement.
For companies that issued their first disclosure notice in August, 2012, this means they have the option of delaying issuing the next notice until the end of January. This will allow more time to prepare their participant disclosures, and perhaps to align the distribution of the notice with other required notifications.
If you have already prepared and/or distributed your 2013 saving plan participant disclosure notice, the IRS will allow you the same 18-month extended gap for your 2014 notices.
Don’t assume that, just because you have a third party administering your 401(k) or 403(b) benefit plan, they will issue the required notification. While most third party administrators will prepare and distribute the disclosure statement, it remains the sponsor organization’s responsibility to make sure it is accurate, meets all legal requirements, and is issued in a timely manner.
If you have additional questions about disclosures or other fiduciary issues surrounding a sponsored benefit plan, please contact Gray, Gray & Gray at (781) 407-0300.