2018 Cost-of-Living Adjustment and Other Participant NoticesNews | November 6, 2017
Cost-of-living adjustments (COLA) have been released for 2018. A chart of the 2018 COLA figures is linked below.
Also, several participant notices are coming due: qualified default investment alternative (QDIA) notices, safe harbor notices, and automatic contribution arrangement (ACA) notices should be distributed no later than December 1, 2017 (or 30-90 days before the beginning of the next plan year).
QDIA Notice: This notice applies to defined contribution plans that allow participant direction of investment. If you have selected a default investment for participants who do not make an election of their own, sending this notice is required to fit within a fiduciary safe harbor. Target date funds are the most common QDIAs. You must send a notice to participants between 30 and 90 days before the beginning of each plan year. The QDIA notice should describe the default fund(s) and the circumstances under which participants will be invested in the fund(s).
Safe Harbor Notice: If you sponsor a safe harbor 401(k) plan, you are required to send a notice to participants between 30 and 90 days before the beginning of each plan year. The notice should inform recipients of their rights and obligations under the plan and describe certain contribution and distribution provisions. We have new guidance on these notices, so if your notice has not been reviewed recently for compliance, we recommend doing so this year.
ACA Notice: If you sponsor a plan that contains an automatic contribution arrangement, where participants are automatically enrolled into the plan, then you have an ACA plan. Plans with an ACA component require distribution of a notice between 30 and 90 days before the beginning of each plan year. The requirements for the notices vary depending on which kind of plan you sponsor.
Please keep in mind that many of these notices are required by ERISA. ERISA notices cannot be sent via e-mail unless specific conditions are met.
If you have any questions or would like assistance in reviewing your annual notices, please contact your Kutak Rock LLP attorney or a member of our Employee Benefits Practice Group listed in the right-hand column.
2018 COLA Chart