As the end-of-year notice season rolls along, keep in mind that you have a few more deadlines looming if you sponsor a retirement plan with a January 1st plan year and your plan contains any of the following features:
401(k) Safe Harbor Notice
If your plan is designed as a safe harbor plan to avoid ADP and/or ACP testing, you must send an annual notice to participants no later than 30 days before the end of the plan year. The notice must be sent to all eligible employees, not just those that participate in the plan. Also, keep in mind that the IRS frowns upon mid-year amendments to safe harbor plans, in part because participants may make deferral decisions based on the information contained in the safe harbor notice. So, make sure you amend your plan for any changes that will go into effect in 2016 before the new year, and be sure to include the changes in the safe harbor notice.
If you have chosen a qualified default investment alternative (QDIA) for participants that fail to make their own elections, you must provide an annual QDIA notice to all participants who were defaulted or may be defaulted into the QDIA. In order to ensure that you don’t miss anyone, most plan sponsors choose to send the notice to all plan participants.
Automatic Enrollment Notice
Finally, if your plan has automatic enrollment, you must send an annual notice describing the automatically enrollment features to all participants who have been automatic enrolled into the plan and haven’t made an affirmative election to change their deferral percentage.
Any of these notices that apply to your plan must be sent to participants no later than December 2nd. Fortunately, you may combine multiple notices in a single document, but make sure you send them on time so you can start 2016 off the right way.