Summary Prospectus Users Still 404(c) Eligible

September 8, 2009 ( - Plan sponsors on Tuesday got a bit of a roadmap from the U.S. Department of Labor's Employee Benefits Security Administration (EBSA) on how to rely on a summary prospectus to meet the prospectus delivery component of safe-harbor provisions.

An EBSA news release said Field Assistance Bulletin (FAB) 2009-03 describes how an individual account plan can stay under 404(c) protection under the Employee Retirement Income Security Act (ERISA) by giving out the new summary prospectus, under Securities and Exchange Commission (SEC) guidelines.  

“The department believes that the delivery of a summary prospectus by an identified plan fiduciary or designee to participants and beneficiaries satisfies the requirements of the ERISA section 404(c) regulations because the required contents of the summary prospectus provide key information about a mutual fund that will assist participants and beneficiaries in making informed investment decisions,” EBSA asserted in the news release.

The summary prospectus is a short-form document, writtenin plain English and a user-friendly format (see SEC Adopts New Summary Prospectus ).    The document’s contents provide a summary of key information about a mutual fund that is useful to participants and beneficiaries in evaluating and comparing their plan investment options, EBSA said.

If an investor wants more details, the summary prospectus identifies a Web site linking electronically to the full version of the document. The new prospectus also provides a telephone number and e-mail addresses for free paper access or via e-mail for the full version as well as other information.

The FAB is available  here .

The SEC rule providing for the summary prospectus model is available  here .