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If an employer is sponsoring a Safe Harbor 401(k) Plan with a Basic Match Formula for the 2016 calendar plan year and wants to change the ADP Safe Harbor provision to a 3% nonelective for the 2017 calendar plan year, the deadline for delivery of the 2017 safe harbor notice and the adoption of the amendment to apply the 3% nonelective formula in lieu of the basic match formula is 30 days before the first day of the 2017 calendar plan year.

A plan sponsor fails to timely deliver the safe harbor notices for the calendar plan year 2017 and, when they call you to inform you of this failure, you learn that there were separate communications made to inform eligible employees of the employer’s ongoing commitment to make a 3% nonelective ADP Safe Harbor contribution and the cpmmunication to eligible employees includes instructions for the participant sign-up process with respect to salary deferral elections for 2017; therefore, the participants were able to make informed savings decisions and there was no missed deferral opportunity.

Calendar year 401(k) or 403(b) plans that have an EACA or a QACA automatic contribution feature must provide eligible employees with an Auto-Enrollment notice between October 2, 2016 and December 1, 2016 (a 30-90 day window period for the PYB January 1, 2017).

It is possible that corrective contributions for missed deferrals may not be required to be made by plan sponsors with auto contribution and/or escalation errors, if discovery and action to start the correct deferral amounts is taken within the parameters of Rev. Proc. 2015-28. 

The QDIA notice is essential in 401(k) or 403(b) plans with automatic contribution arrangements and in other participant directed 401(k) or 403(b) plans when the plan fiduciaries want relief under ERISA 404(c)(5) for amounts invested in a default investment. 

The 2017 annual QDIA notice must be provided no later than December 1, 2016 (a 30-day advance notice period) to not just active employees but also to terminated employees with vested benefits still being held by the plan (including any alternate payee’s QDRO benefits and beneficiaries’ death benefits).

Plans with participant directed investments, including those with self-directed brokerage accounts, must comply with the annual 404(a)(5) notice requirements. 

If delivery of an ERISA 404(a)(5) annual participant notice for 2015 took place on October 20, 2015, then the delivery of the ERISA 404(a)(5) annual notice for 2016 will be considered timely if delivered to plan participants any date between October 20, 2016 and December 21, 2016.   

Any failure to comply with ERISA 404(a)(5) jeopardizes the ability of plan fiduciaries to rely on any stated intention to voluntarily comply with fiduciary protection standards under ERISA 404(c).  

A TPA who fails to assist the plan sponsor with providing the ERISA 404(a)(5) annual participant notice requirements can cause a “gap” in the plan’s compliance with ERISA 404(c) and plan fiduciaries could become personally liable for poor investment decisions made by plan participants – because the brokerage firms did not step up to provide this fee and investment information disclosure to these plan sponsors and compliance is left up to the plan sponsors and their TPA firms.