Additional Disclosure Requirements

The plan sponsor of a defined benefit or money purchase plan must provide members with a written notice concerning a plan amendment that significantly reduces future benefit accruals under a plan. The notice must be provided after the amendment is signed and 15 days before its effective. Failure to provide the notice results in a continuation of the pre-amendment provision. The Act made these changes:

  • Gives more specific wording that must be included in the notice.

  • Changes the timing of the notice to "a reasonable period" before the amendment is effective.

  • Allows the notice to be given before the amendment is signed.

  • Failure to provide the notice results in an excise tax of $100 per day per individual who has not received the notice.