Updated August 24, 2023
Another provision of SECURE 2.0, in Section 338, has modified the requirement to provide paper account statements effective with plan years beginning after December 31, 2025. Before SECURE 2.0, electronic delivery of these statements was possible (read here for more information about electronic disclosure rules). SECURE 2.0 may require some paper-delivery.
Current law requires quarterly statements for employee-directed defined contribution plans and annual statements for plans without employee investment direction; for defined benefit plans, a participant statement is required at least once every three years.
Defined Contribution Plans will be required to provide a paper statement at least once a year, unless a participant affirmatively consents to electronic delivery of the statement. The other three quarterly statements are not subject to this rule and may be provided electronically.
Defined Benefit Plans will need to provide a paper benefit statement once every three years, unless a participant affirmatively consents to electronic delivery. Plan sponsor should be able to verify that the notices were sent, that the participant received the notice, and if the validation does not happen, then have processes in place to find missing participants or beneficiaries.
Additional Consolidation of Notices to Come
The lawmakers gave the Treasury and the DOL until December 31, 2024 to issue new regulations to allow employers to consolidate required plan notices.
More Simplification and Clarification
Other sections of the Act provide for additional simplification and clarification, including annual defined benefit plan funding notices and description of benefits/risks associated with taking a pension lump sum.
Let Pinnacle Plan Design Help
Consultants at Pinnacle Plan Design are actively monitoring new guidance concerning SECURE 2.0. This represents our understanding of the laws at this time. Additional guidance will provide additional clarity. If you have any questions about the changes to the plan notice and disclosure rules, don’t hesitate to contact us at (520) 618-1305.