By Kelsey Mayo – Partner, Poyner Spruill
It is hard to believe, but the end of the year is rapidly approaching! To avoid costly errors that can arise from inadvertent errors in the year-end crush, plan sponsors should begin talking with their service providers now about what must be done before December 31, 2022.
Retirement Plan Disclosures. There are a host of notices and disclosures that need to be made throughout the year. However, there are several notices generally given at the end of the year. The following is a list of common yearend disclosure requirements for retirement plans:
• Safe harbor notice — For plans utilizing a safe harbor plan design, this notice must be distributed to participants 30-90 days prior to the beginning of each plan year for plans relying on safe harbor rules; by December 1, 2022, for calendar-year plans.
• Automatic contribution arrangement (ACA) notice — Plans utilizing an automatic contribution feature must provide a notice to participants 30-90 days prior to the beginning of each plan year; by December 1, 2022, for calendar year plans.
• Qualified default investment arrangement (QDIA) notice — Plans availing themselves of the fiduciary protections of using a QDIA must provide a notice to participants 30-90 days prior to the beginning of each plan year; by December 1, 2022, for calendar year plans.
• Annual participant fee disclosure documents — ERISA plans must provide an annual fee disclosure at least once in each 14-month period. If you distributed the fee notice with your other notices toward the end of last year, plan to do so again this year.
• Summary annual report (SAR) — ERISA-covered defined contribution plans must provide the SAR to participants within nine months of the end of the plan year or two months after the Form 5500 filing deadline. For calendar year plans, this generally means the SAR is due September 30 if the Form 5500 was not extended or December 15 if the Form 5500 was extended.
More questions about the plan year ending? Ask questions here.
These notices should be carefully reviewed to ensure all provisions are included and accurate and reflect all updates made in the past year. Keep in mind that vendor-prepared and distributed notices are often computer-generated and may not accurately reflect special features of a plan (particularly if you use an individually designed plan or have any special addenda or special effective dates for your pre-approved plan).
For a retirement plan, ineffective or incorrect notices may result in confusion among participants as well as errors and penalties. Be sure you know what notices are required, review all notices carefully, and address any concerns or questions with your trusted team of service providers.