Plan sponsors of qualified plans may need to issue one or more annual notices to participants prior to the end of each plan year. Failure to issue a required annual notice can have a significant impact. For example, if a plan sponsor forgets to issue the annual 401(k) safe harbor notice, the 401(k) plan will violate the safe harbor requirements.

Several years ago, the IRS introduced us to the concept of annual notices by requiring plan sponsors of 401(k) safe harbor plans to issue an annual notice to participants. Today, the number of annual notice requirements has increased. This advisory focuses on typical annual notices that defined contribution plans must issue to participants. For these typical notices, plan sponsors must distribute the notices no later than 30 days before the end of the plan year. For a 2009 calendar year plan, the deadline would be December 1, 2008.

The following table provides a list of the most common notices that plan sponsors may need to distribute:

  • Traditional Safe Harbor 401(k) Notice 
  • Qualified Automatic Contribution Arrangement – Safe Harbor 401(k) Notice 
  • Eligible Automatic Contribution Arrangement Notice 
  • Qualified Default Investment Alternative Notice (QDIA)

Please click here to view table.

If more than one notice must be sent to participants, plan sponsors can combine the notices in a single mailing. You should also note that these notices may also require distribution during the plan year to newly eligible participants or rehired participants. Finally, please keep in mind that sponsors of defined contribution plans may have other notices they must provide to participants, such as diversification notices (ERISA Section 101(m); IRC Section 401(a)(35)) and participant statements (ERISA Section 105(a)).