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EP Examination Process Guide - Section 9 - Participant Rights - Plan Events

Explanation of  plan events, what notices participants should receive based upon these plan events and when these notices should be issued.

  1. When the Plan is Amended
    When the plan is amended or when the information in the Summary Plan Description (SPD) has changed, participants should receive a Summary of Material Modifications (SMM).

  2. When a Plan Sponsor Submits an Application
    When a plan sponsor submits an application to the IRS for determination of the qualified status of a new or amended plan or upon plan termination, participants are allowed to comment to the IRS and/or DOL regarding the plan’s qualification and must be notified of their right to comment via an Interested Party Notice.

  3. When the End of the Plan Year Has Passed
    When the end of the plan year has passed, participants should receive a Summary Annual Report (SAR).

  4. When the Plan is Intended to be an IRC 401(k) or (m) Safe Harbor Plan
    When the plan is intended to be an IRC 401(k) or (m) safe harbor plan, an annual notice must be provided to all employees eligible to participate in the plan.

  5. When the Employer Fails to Make a Required Contribution
    When the employer fails to make a required contribution under the minimum funding standards, notice of such is required.

  6. When the Employer Requests a Waiver of the Minimum Funding Requirement
    When the employer requests a waiver of the minimum funding requirement, notice of such must be provided to plan participants, beneficiaries and alternate payees.

  7. When Future Benefit Accruals Will Be Significantly Reduced
    When future benefit accruals will be significantly reduced by a plan amendment, participants should receive a notice explaining how future accruals are expected to be reduced. The notice is generally referred to as a 204(h) Notice.

  8. When a Plan is to be Terminated
    When a plan is to be terminated, participants must receive a written notice of the company’s intention to terminate the plan and a notice of plan benefits.

  9. When Funding Falls Below a Certain Level
    In a defined benefit plan, when funding falls below a certain level a notice must be issued outlining the estimated under-funded amount and the Pension Benefit Guaranty Corporation coverage.

  10. When Excess Pension Assets Are to be Transferred
    When excess pension assets are to be transferred to retiree health benefit accounts, participants should receive a notice of the employer’s intent to transfer these assets.

  11. When a Plan Administrator Makes a Mistake
    When the plan administrator makes a mistake in the day-to-day administration of the plan, the participants will generally receive a letter explaining the correction made to the plan.

  12. When an IRC 401(k) Plan Fails the ADP/ACP Tests
    When an IRC 401(k) plan fails the actual deferral percentage (ADP) test or actual contribution percentage (ACP) test, the plan administrator should issue a notice of correction letter to all affected highly compensated employees, or when applicable, a notice that a corrective distribution is being made.

  13. When a Plan May Impose a Blackout Period
    In an individual account plan, the plan may impose a blackout period during which there can be a temporary suspension, limitation, or restriction on the ability of participants to direct or diversify assets or to obtain loans or take plan distributions. When a blackout period is imposed, participants should be formally advised about the duration and limitations of the blackout period.
Page Last Reviewed or Updated: 18-Mar-2014