Retirement plan participants receive multiple communications from their plans. Some disclosures are sent automatically, such as each year, every quarter or when joining a plan. Other disclosures are sent when “triggering” events occur, such as termination of employment or divorce. Certain plan documents and reports are available upon request. Beneficiaries, such as spouses, can generally request a copy of a document that is not automatically sent to them.
The most important information you will receive automatically:
- A Summary Plan Description (SPD) is given to you when you join a plan. It is a summary of the rules that describe the features of the plan and how it operates.
All company and union plans are required to have these written rules, and to give all participants an SPD when they join the plan. An SPD explains the features of the plan and how and when you can earn retirement benefits. Employers can change the rules of a plan, but your rights to benefits will depend on the rules in effect while you are working and when you leave employment. You will receive an updated SPD at least every ten years, or within five years if changes have been made to the plan. You also may make a written request for a copy of the latest SPD. Additionally, the Pension Benefit Guaranty Corporation (PBGC) maintains an archive of certain old SPDs. You can request an old SPD here.
SPDs contain information crucial to establishing your right to retirement benefits and should be kept for future reference.
- A Summary of Material Modifications (SMM) is provided whenever changes are made to the plan that could affect your right to benefits, but aren’t included in the latest SPD.
SMMs must be sent within 210 days after the end of the plan year in which the change was adopted.
- An Individual Benefit Statement describes the benefits you have earned, whether you have a legal right to receive all or a portion of those benefits, and when you will become partly or fully entitled to (or vested in) your benefits. INDIVIDUAL BENEFIT STATEMENTS SHOULD BE KEPT FOR FUTURE REFERENCE.
Benefit statements must also tell you if Social Security or other benefits will be subtracted from your final benefit amount and/or how much your benefit amount will be reduced for early retirement.
The information in the benefit statement and the timing of the statement depend upon the type of plan you are in:
– Benefit statements from defined benefit pension plans must be sent every three years to participants employed by the employer. Alternatively, the plan administrator may send a notice each year that a statement will be provided if requested. Participants and beneficiaries may request one benefit statement per year.
– Benefit statements from 401(k) plans where participants choose among investment alternatives must be sent to participants quarterly. The statement will include the balance in the account, the value of each investment (including employer securities), an explanation of any restrictions on the right to direct investments, any individual fees charged to the account, and a statement of the importance of diversifying investments. Beneficiaries, such as spouses, may request a benefit statement once a year.
– Benefit statements from traditional profit-sharing plans and 401(k) plans that do not permit participants to choose among investment alternatives must be sent annually to participants. The benefit statement will include the value of each investment in the account, including any employer securities. Beneficiaries may request a benefit statement once a year.
- A Deferred Vested Statement (or “Statement of Vested Benefits”) is given to participants who leave work covered by a retirement plan with the right to receive benefits in the future.
This statement shows that the participant is entitled to payment of benefits at a later date and the amount of those benefits. This notice can be especially important to separated participants in proving that they had not received their benefits when they left employment, and therefore, will still be entitled to payment of those benefits later, often at retirement age. Participants receiving this notice should keep it for later use.
Other documents you may receive automatically:
- An Annual Funding Notice is sent to participants in defined benefit pension plans.
The notice gives basic information about the funded status of the plan, assets and liabilities of the plan, the funding percentage of the plan and information about the benefits guaranteed by the Pension Benefit Guaranty Corporation. Read more about this notice here.
- A Summary Annual Report (SAR) is sent to participants in defined contribution plans, such as 401(k) plans, profit sharing plans, and Employee Stock Ownership Plans (ESOPs).
The SAR is a summary of the complete annual financial report (Form 5500) that is filed with the Labor Department each year.
- There are special fee and investment disclosure requirements for participants in 401(k) and certain 403(b) plans that permit choice among investment alternatives.
These disclosures provide the fee and investment information participants need to make informed decisions about their investments. Read more here.
Disclosures that result from triggering events:
A triggering event can be an important point of decision for participants and beneficiaries.
Some disclosures relating to triggering events include notices about the status of the plan and others are directly related to participant decisions. The timing of triggering event notices can be particularly important when the event offers an opportunity for action by the participant.
Some important triggering event notices include:
- A Critical Status Notice indicates that a multiemployer pension plan has funding or liquidity problems that could lead to a reduction in some benefits. Read more about this here.
- A Notice of Failure to Meet Minimum Funding Standards applies to company pension plans that are not multiemployer plans. The notice indicates that the company has failed to make a required payment to the plan.
- A MPRA notice required by the Multiemployer Pension Reform Act of 2014 (MPRA) must be sent to participants and retirees when plan trustees of severely underfunded multiemployer plans apply to the US Treasury Department for permission to cut benefits. The notice will inform participants and retirees of their opportunity to submit comments to the Treasury Department about the proposed cuts to benefits.Read more about this noticeon our Fact Sheet,“Resources for Participants in Multiemployer Pension Plans in Critical andDeclining Status.”, from theIRS, and from thePBGC.
- A Notice of Significant Reduction in Future Benefit Accruals is sent when a plan is amended to reduce future benefits or eliminate special early retirement benefits or lump sums.
Triggering event notices that may require action include:
- A Blackout Notice for 401(k) plans is an advance notice of temporary restrictions on modifying investments. It must be sent at least 30 days before any restrictions apply.
- A Notice of the Right to Sell Employer Stock and reinvest in other plan alternatives. The notice is sent to participants in 401(k) plans in advance of the first opportunity to sell. Read more here.
- A Suspension of Benefits Notice must be provided during certain periods of reemployment that can cause pension benefits to be suspended. This notice will include the right to appeal a suspension of benefits.
- Notices triggered by divorce include a notice from the plan that a domestic relations order has been received. The notice includes information on the plan procedures for determining whether the domestic relations order can be qualified (approved) by the plan. A second notice is sent when the qualification determination is made.
Notices Triggered by Termination of Employment are particularly important for participants to understand their rights to receive benefits, what form the benefits will be, and the rights of spouses and other beneficiaries.
The notices are provided in a reasonable period of time in advance of termination of employment. They include:
- Notices of Payment Options describe the different ways that benefits can be paid. This includes, if offered, lifetime payments, payments for a period of years, and payments as lump sums. In some instances, a comparison of the values of different choices must be provided.
- Joint and Survivor Notices explain the choices that married couples and domestic partners have in choosing how benefits will be paid. Read about this here.
- Tax Notices explain IRS rules for tax-free rollovers of lump sum pension payments into an IRA or another employer plan and the taxes that will be assessed on other distribution choices. Read about this here.
For general information on forms of benefit payments at termination of employment see our Roadmap to Retirement, “Form and Amount of Benefits.”
Information that is available upon request:
- The Plan Document is the legal document that contains all of the plan’s rules.
The Plan Document may be requested in writing by participants and beneficiaries. Other legal documents that can be requested include collective bargaining agreements and trust documents. Plan documents must also be available for viewing at the office of the plan administrator.
- Financial Reports, known as Form 5500s, are the annual reports that plans must file with the Labor Department.
FORM 5500s contain detailed financial information about the plan and may be requested from the plan administrator in writing. The latest Form 5500s can also be searched from the Labor Department website or requested by calling the Labor Department at 1-866-444-3272. Also, you can search for Form 5500s using the website, FreeERISA.
- Other disclosures, such as Summary Plan Descriptions and Individual Benefit Statements, can also be requested by participants and beneficiaries within certain limits, such as one written request per year. In some cases, people who are divorced or are going through divorce can request plan documents.
When documents are requested plan administrators must provide copies within 30 days. Plan administrators can charge a reasonable copying fee for some documents. If a plan administrator fails to respond to a written request for a document, participants and beneficiaries can contact the Labor Department at 1-866-444-3272.
For additional information on disclosures, see these resources from the US Department of Labor:
- What You Should Know About Your Retirement Plan, Chapter 3: Plan Information to Review
- Reporting and Disclosure Guide for Employee Benefit Plans