The Frugal Fiduciary Small Business 401(k) Blog
Get the latest industry news, deadlines and tips you need to know to help tackle your fiduciary responsibility needs.
On May 27, 2020, the Department of Labor (DOL) published a final rule that should greatly expand the electronic delivery of ERISA-mandated disclosure notices to 401(k) plan participants. More specifically, the rule creates two new safe harbors that give employers the ability to post notices to a website or e-mail them directly to plan participants when certain requirements are met. Both safe harbors take effect July 27, 2020. This 401(k) reform is great news, if long overdue.
On October 22, 2019, the Department of Labor (DOL) proposed new regulations that would supplement the agency’s current rules for the electronic distribution of 401(k) disclosure notices to plan participants. Specifically, the proposal would add a new “notice and access” rule that permits employers to post notices to a website when certain requirements are met. This common-sense 401(k) plan reform is long overdue.
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The most expensive thing most people will buy in their lifetime is retirement. Perhaps you’ve never thought of “buying” retirement, but that’s exactly what you do when you contribute to a 401(k) plan – you’re saving today to afford income in retirement. When you consider that income may need to last 10, 20, even 30 years, it’s easy to understand why retirement is not cheap.
Most of us know it is smart to save money for those big-ticket items we really want to buy - a new television or car or home. Yet you may not realize that probably the most expensive thing you will ever buy in your lifetime is retirement.
401(k) plan sponsors have a fiduciary responsibility to distribute certain information to plan participants from time to time. The purpose of these disclosures is important - to equip plan participants with the information necessary to make timely and informed decisions about their 401(k) account. However, these important participant disclosures can also be many – and spread throughout the year - which can make their distribution seem like an overwhelming fiduciary responsibility to many 401(k) plan sponsors.
When a small business offers a 401k plan, its employees often need some sort of 401k education in order to make the two primary investing decisions applicable to 401k participation – “how much should I save?” and “where should I invest?”