Communicating with Non-Participating Employees

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Today we wanted to talk about communicating with non-participating employees as a plan sponsor.

Every employee has the right to be informed about their eligibility to participate in our 401(k) retirement plan. It's essential for plan sponsors, like us, to make sure all employees, whether they've chosen to participate or not, understand the plan's workings, so they can make an informed decision anytime.

Some may think that non-participating employees aren't a concern due to their limited assets in the plan. However, from the Department of Labor's viewpoint, not informing these employees properly is seen as discrimination. If we don't give everyone the right information, it could seem like we're treating some employees differently. This could lead to investigations, and we might face fines.

That's why we ensure all eligible employees receive the necessary notifications, regardless of their current participation status. By doing this, we have evidence of our commitment to compliance, which can be useful during any inquiries from the Department of Labor, IRS, or legal teams.

For more information on communicating with non-participating employees, contact us today.

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