Communications—

What must be given to participants, when should it be given, and how?

Retirement plans are complex and have many notice and communications requirements in addition to those imposed by 404(c). Effective communications with participants is challenging and encompasses a broad range of activities from initial plan enrollment, execution of various elections, ongoing account activity and investment option and plan information, and event driven requirements.

A plan must establish procedures to insure that required communications are delivered timely.

Failure to provide timely information can subject the plan administrator to a fine of $100 per day for failing or refusing to provide requested information within 30 days (ERISA Section 502(c)(1)).

Additionally, fiduciaries can create liability under ERISA if failure to properly notify a participant of a requirement (e.g., QJSA election) or timely provide required information (e.g., prospectus delivery) causes (or is construed to cause) damage to a participant or beneficiary.

Some information is best distributed by the Employer. However, the Employer should rely upon the Plan investment manager and Third Party Administrator (TPA) to provide the Employer with the material it is to distribute and to instruct the Employer when to distribute it. Some information is either best distributed, or can only be distributed, by the investment manager or TPA.