Ensuring Participants Receive Important Plan Information

Keeping employees informed about their retirement account and making sure they have the information they need is an important part of what we do here at Guideline.

The Department of Labor, IRS, and Pension Benefit Guaranty Corporation (PBGC) require notices or disclosures to be furnished to eligible employees or plan participants when certain events occur. When a notice or disclosure is required, Guideline will furnish the notice to participants so long as we have accurate contact information. 

In the event that Guideline does not have valid or up-to-date participant contact information, we rely on the plan sponsor to distribute important notices to participants.

Electronic Communications

As a part of Guideline’s service commitment to our clients, Guideline will furnish all required plan information and notices to participants so long as the plan sponsor provides a valid email address and the participant consents to electronic disclosure. If employees do not have an email account and routine access to a computer as a part of their job, Guideline requires the sponsor to ensure that a personal or company-issued email account is set up, as well as computer and internet access. 

Being able to efficiently distribute plan information to participants enables us to make our services available at a competitive price and reduces paper waste. 

Responsibility for Distributing Notices to Participants with Outdated Contact Information

If a plan sponsor is unable to provide Guideline with valid contact information for an employee, the responsibility to provide appropriate disclosures or notices will fall to the plan sponsor. It is common industry practice for service providers to require plan sponsors to furnish required notices.

Copies of required notices will be posted to the plan sponsor for distribution in your Resource Library. The sponsor may choose to distribute the notices by mail, email (only if the participant has consented to use of their personal email), or any other means that will ensure the participant will receive the information. If a notice is emailed, the employee should always be advised that he or she may request a hard copy of any notice without charge. A plan sponsor should provide a hard copy upon participant request.

If a sponsor is able to obtain updated information for a participant, that information should be updated in your Guideline Roster, which may be accessed here. This will aid Guideline in directly distributing future notices to participants rather than relying on the plan sponsor for distribution.

Events Requiring Notice

Generally, when plan terms, sponsor or administrator information changes, participants are required to be notified of such changes. Employees must also receive initial and recurring notices when they become eligible to participate. Employees who are no longer employed with the company but who were eligible to participate during a given period or have open accounts in the plan must also receive notices in many cases. Examples of the notices and disclosures Guideline provides include:
  • Plan information
  • Enrollment information
  • Beneficiary forms
  • Distribution information
  • Fee disclosure
  • Automatic enrollment notice
  • Safe Harbor Notice
  • Blackout Notice
  • QDIA Notice
  • 404(c) Notice
  • Plan Termination Notice
  • Summary of the plan’s annual financial report 

What steps can I take to locate a participant who no longer works for the company?

There are several steps you can take to help ensure you have updated information for employees:
  • When an employee quits or is terminated from employment, remind them to update their Guideline account with a permanent email address. We also recommend requesting a permanent forwarding address, which can be used to mail the employee’s year-end W-2, as well as important information regarding the plan. Let the employee know that they should keep their Guideline account information current just as they would with any other financial institution.
  • Try contacting the individual using any available information, such as their last known email, address, phone number, or emergency contact. Linkedin or social media accounts have also been effective in tracking down missing employees. Use Guideline’s template letter (available upon request) to let them know we need updated information to send them important plan information.
  • If current contact information for a participant cannot be found, a professional search service may be utilized to locate the participant. Sponsors may utilize their own search service or contact Guideline for assistance locating “missing” participants via a paid search service. 

Consequences for Missed Notices

If notices are not distributed timely, penalties may accrue. Penalties vary based on the type of notice that was not distributed but can be as much as $100 per participant per day for a tardy blackout notice, for example. Thus, it is important that plan sponsors make their best effort to distribute notices provided by Guideline to participants for which Guideline lacks information.   

Learn more about notice requirements on the IRS website. Information about correcting plan operational errors may also be found on the IRS website.