What kinds of information do plan disclosures contain?
Plan disclosures include information on:
How to earn retirement benefits
How to later claim the retirement benefits that are earned
Descriptions of how the plan operates
The identities of the persons responsible for managing the plan
The plan’s financial situation, so employees and retirees can determine whether those managing the plan are doing a good job
Some disclosures will present choices for you to make, such as payment options at termination of employment or investment choices.
See our resources below for a list of important disclosures you may receive from your retirement plan.
What plans must provide disclosures?
Federal law requires retirement plans offered by private employers and unions to provide a wide variety of disclosures and information to plan participants and beneficiaries. Nonprofit organizations with 403(b) plans must also follow these federal disclosure rules.
However, governmental plans, including 403(b) plans sponsored by a government, have their own rules on what information has to be given to individuals. Churches and certain religiously affiliated non-profit organizations may also be exempt from federal disclosure rules.
When will I receive disclosures from my retirement plan?
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. Other plan documents and reports are only available upon request. Beneficiaries, such as spouses, can generally receive disclosure documents upon written request.
Disclosures or notices that require a decision or some action from you must be sent sufficiently in advance for you to make an informed decision and notify the plan administrator of your decision.
Why are disclosures important?
Disclosure of information to participants and beneficiaries is a central part of the private retirement system. It is important that retirement plans send out regular disclosures that are written in understandable language. It is also important that retirement plans send out disclosures on time and use delivery methods that make sure disclosures are always accessible and can be stored for later use.
Plan information enables participants and beneficiaries to:
Understand their benefits so they can make informed decisions that will lead to a secure retirement, such as when to retire or how to invest retirement funds.
Check for mistakes, so that they can contact their retirement plans to have those mistakes corrected
Understand how to claim their earned retirement benefits
Prove their benefit rights if they are ever disputed, because disclosure documents can be used as evidence.
Monitor the plan managers to ensure they are doing a good job and operating the plan in the interests of participants and beneficiaries.
There is a lot of controversy about disclosures.
Questions are raised about how many disclosures are necessary, what information should be in the disclosures and how the disclosures should be delivered. When changes to disclosure requirements are proposed, the Pension Rights Center works to ensure that any new requirements will benefit participants and beneficiaries.
In today’s challenging pension environment, our work is more important than ever. Your contribution will help make it possible for the Center to continue its crucial role as a national consumer organization committed to protecting and promoting retirement security.