It’s only September, but the end of the 2014 plan year is fast approaching. That means more than compiling data for information reporting and preparing for the 2015 plan year — it also means providing notices to plan participants before New Year’s Eve. Prudential outlines the notices a plan may need to provide by year’s end.
These notices must be issued by specific 401(k) plans:
- ADP/ACP safe harbor notice (by those designed to satisfy the Small Business Job Protection Act of 1996 ADP/ACP safe harbor design rules and that provide 3% employer nonelective contributions or a specific schedule of employer matching contributions)
- automatic contribution arrangement notice (by those that want to ensure ERISA preemption of state wage withholding laws forbidding involuntary wage withholding)
- eligible automatic contribution arrangement notice (by those designed to allow penalty-free distributions of accidental automatic deferrals and plans that allow six months to distribute excess contributions and excess aggregate contributions without imposing the 10% excise tax)
- qualified automatic contribution arrangement (QACA) notice (by those designed to satisfy the Pension Protection Act of 2006 automatic enrollment and escalation safe harbor plan design and that provide 3% employer nonelective contributions or a specific schedule of employer matching contributions)
These notices must be issued by specific plan sponsors:
- ADP/ACP safe harbor contingent notice (by those that want to be able to adopt the 3% employer nonelective contribution safe harbor design before the plan year ends)
- ADP/ACP safe harbor follow-up notice (by those that have furnished the contingent notice and adopt that safe harbor design for the plan year)
- QACA contingent notice (by those that want to remain able to adopt the 3% employer nonelective contribution safe harbor design before the end of the plan year)
- QACA follow-up notice (by those that provided the QACA contingent notice and decide to adopt the QACA safe harbor design for the plan year)
