The operation of the plan is governed by the plan document and government regulations. Some of the key components of operations are:

Timely deposits – The Department of Labor (DOL) has set a 7 business day “safe harbor” guidelines for small plans (less than 100 participants) from making 401k and 403b deposits. For example, if your employees get paid on Friday, October 15th, it is presumed that if you make the 401k/403b deposit by Monday, October 25th, barring any holidays, you will satisfy the DOL’s safe harbor deposit requirement. If you make deposits less frequently than the DOL’s safe harbor guideline, you are subject to the “as soon as administratively feasible” guideline. Large plans (100 or more participants) do not have a “safe harbor” guideline at this time. They are subject to the “as soon as administratively feasible” rule. The DOL’s ultimate deadline is 10 business days after the end of the month in which the 401k or 403b contribution was withheld from the participant’s pay. However, we are finding that the DOL auditors generally dismiss this rule. The IRS auditors may also examine your deposits for timeliness.

Participant Communications – There are several notices that must be given to participants. In general they are as follows:

REQUIRED NOTICES FOR ALL PLANS

Summary Annual Report (SAR) – Annual notice to participant regarding Form 5500 data. Distribute within 60 days of Form 5500 due date.

Annual Funding Notice (AFN) – Same as SAR, however, applies to Defined Benefit Plans. Distribute within 60 days of Form 5500 due date.

Summary Plan Description (SPD) – Given to participants upon entry into plan and upon restatement of plan document. Distribute within 90 days of restatement or becoming participant.

Summary of Material Modifications (SMM) – Given to participants when provisions of SPD are modified. Within 210 days of close of plan year in which change applies.

Participant statements –Quarterly statements required for participant directed plans. Distribute within 45 days of quarter end. Annual statements are required for trustee directed plans. Distribute by Form 5500 deadline.

OTHER NOTICES THAT MAY APPLY

Safe Harbor Notice – Annual notice for Safe Harbor 401k Plans. Distribute within 30 to 90 days prior to plan year.

Qualified Default Investment Alternative notice (QDIA) – Annual notice required for plans with QDIA. Distribute at least 30 days prior to plan year.

Eligible Automatic Contribution Arrangement (EACA) Notice – Annual notice for plans with EACA contribution provisions. Distribute within 30 to 90 days prior to plan year.

Qualified Automatic Contribution Arrangement (QACA) Notice – Annual notice for plans with QACA contribution provisions. Distribute within 30 to 90 days prior to plan year.

Blackout Notice – Applies to participant directed plans that are changing record keepers. Notice must be given out 30 to 60 days in advance of change.

Fee Disclosure Notice – Applies to participant directed plans. Notice must be distributed annually. The specific due date varies and is set by Plan Administrator, which is typically the Employer.

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