Who is responsible for sending notices?
You are! (If you’re the plan sponsor.)
Many retirement plan service providers have historically supported the plan by offering to send plan communication. These service providers typically email and, at times, mail required notices for the plan to add value to their offering. In addition, they use this service as a way to entice the plan sponsor to engage with them.
When the Department of Labor (DOL) released its best practices for participant communication and locating missing participants in early 2021, they confirmed that the responsibility for notice distribution remained with the plan sponsors. With this clarification, service providers could continue to send communication, but they did not hold the overall liability regarding that responsibility. As the plan sponsor of your company-provided retirement plan, the responsibility of participant noticing is yours. Therefore, if you decide to outsource participant noticing and communication, you’re required to oversee and manage the provider to ensure they meet the DOL best practices for the plan to remain compliant.
Some service providers will agree to accept this liability; in this case, as the plan sponsor, you still must verify that the process is being documented against a potential investigation. Additionally, you should enter a contractual agreement with the service provider clarifying that they accept all liability and risk of costs to the plan. Finally, even if the designated service provider offers full indemnification, you should still require proof of work as part of your oversight responsibility.
Basically, oversight of plan communication is the plan sponsor’s responsibility, so you either need to manage the process or do it yourself.
If you’re interested in how Plan Notice can support this responsibility, please contact us. We are a proprietary software solution that provides participant communication and required noticing. We accept full liability regarding costs or fines the DOL may impose related to proper noticing. Additionally, we provide documented proof of noticing and receipt verification via our audit log. This documented proof shows all efforts your plan has made and each step you’ve taken, per DOL best practices, to confirm that all participants receive plan notices and communications.
