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Retirement Plan Participant Notices - When a Plan May Impose a Blackout Period

An individual account plan may impose a blackout period during which there is a temporary suspension, limitation or restriction on the ability of participants to direct or diversify assets, obtain loans or take plan distributions. The most common reasons for imposition of a blackout period include changes in investment alternatives or recordkeepers, and corporate mergers, acquisitions, and spin-offs that affect the pension coverage of groups of participants. When a blackout period of three or more business days is imposed, affected participants and beneficiaries should be notified.

Blackout notice

Description: The blackout notice describes when a blackout period is being imposed, including any restrictions that  limit a participant’s ability to direct or diversify their  plan account.

What it should contain: A blackout notice should contain information on the expected beginning and end date of the blackout. The notice should also provide the reason for the blackout and what rights will be restricted as a result. The notice must specify a plan contact for answering any questions about the blackout period. For additional information on blackout notices, see DOL Regulation Section 2520.101-3(e)(2) (Final Rule) and the Department of Labor - Employee Benefits Security Administration.

Timing: Each participant should receive a blackout notice at least 30 days, but not more than 60 days, in advance of any blackout. If extenuating circumstances prevent the plan administrator from sending the notice out at least 30 days prior to a blackout period, the administrator must provide the notice as soon as administratively possible under the circumstances.

Who is responsible for sending it: The administrator of the plan.

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Page Last Reviewed or Updated: 18-Aug-2016