Where Do you Go for Financial Advice?
There was much in the Pension Protection Act to garner plan sponsor attention—but, perhaps, no upcoming change will have as immediate an impact on participants as the new requirement to provide annual individual benefit statements, as well as new notices to participants regarding diversification rights, effective for plan years beginning after December 31, 2006. This new affirmative obligation to furnish pension benefit statements automatically was explained in greater detail by Field Assistance Bulletin 2006-03 (FAB), issued by the Department of Labor's Employee Benefits Security Administration (EBSA) just before year-end (see "Notice Notice," PLANSPONSOR, February 2007). The notices are required on various frequencies, depending on the type of plan and the degree of participant direction of the account, but at least: once each quarter (in the case of individual account plans that permit participants to direct their investments); annually for individual account plans that do not permit participant direction; once every three years in the case of defined benefit plans. In issuing the FAB, EBSA noted that concerns had been expressed about the imminent effective date, the absence of guidance, and the cost and burdens "attendant to pension benefit statement compliance efforts prior to the adoption of pension benefit statement regulations and the issuance of model pension benefit statements by the Department." Since these notices will be new to participants, this month's Know How explains the purpose behind them, and how participants should take advantage of this new information. As always, we welcome your feedback and suggestions for future Know Hows. Field Assistance Bulletin 2006-03 is available online at www.dol.gov/ebsa/regs/fab_2006-3.html. —Nevin E. Adams