Do I need to verify educational communication that isn’t a required retirement plan notice?
Technically, no—it’s not required, but it’s always good to keep track of distribution and delivery.
Educating participants is a part of offering a valuable retirement benefit to your employees and plan participants. Ensuring that eligible employees have an understanding of the benefit improves utilization of and appreciation for it.
In addition, in the case of an investigation, the Department of Labor (DOL) and Internal Revenue Service prefers to see company involvement in educating participants, as it confirms the benefit is being provided to all employees and that all employees have a good understanding of it. Historically, higher-paid employees with access to outside consulting were more heavily utilized retirement plans. The DOL has worked diligently to make it clear to plans and plan sponsors that retirement benefits should be for all employees and that the plan should support employees who don’t have access to outside counsel. In addition, most plans engage a financial advisor to support and educate all participants.
When it comes to education, validation of delivery and receipt is not scrutinized like required plan notices are. However, if a plan sponsor does track educational notices and does verify their receipt, it benefits the plan’s compliance in a couple of ways. First, by tracking this communication, the plan has additional verification of participants’ communication contacts. If a participant is reviewing educational material, the plan can prove it has been able to reach them; thereby verifying that the participant is not “lost.” Secondly, tracking educational communication proves the plan attempted to educate all its participants, which could be beneficial in the case of a DOL, IRS, or legal investigation against them.
In a nutshell, as a plan sponsor, you don’t need to track and verify notifications that are not DOL required, but it never hurts to “over-comply.”
Plan Notice can support you with both required and educational communication. Our systems customize each type of notice, allowing for different levels of verification and different processes regarding service escalation. This customization not only helps plans develop specific procedures surrounding required notifications to reach compliance but also enables different procedures for non-required notifications that still have proof of distribution and tracking. Please contact us if you’re interested in learning how Plan Notice can provide you with these services. We’ll be happy to walk you through our system demonstration.
