DOL Issues Final Blackout Notice
Rules
January 31, 2003
On January 24, 2003, the Department of Labor issued Final Rules on the Blackout Notice, including a new Sample Blackout Notice. Clarifications and many of the comments received to the Interim Final Rules were incorporated into the Final Rules. Following are highlights of some of the changes.
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The notice beginning and ending dates have been made more flexible in that the sponsor may use the calendar week that the blackout will begin and end. However, if this option is used, the sponsor must provide affected participants and beneficiaries, a toll-free number or a free website that may be accessed to get the specific beginning and ending date.
In addition, furnishing a notice to the last known address of a participant or beneficiary is sufficient to comply with the notice requirements.
The interim blackout notice rules mandated that a person's name must be provided to the participant to contact for further information. The Final Rule modified this to allow the substitution of a "contact" which may be a department that is responsible for answering questions.
Calendar days, and not business days, are to be used when counting days regarding a blackout period.
The notice should only include language about the specific rights that are suspended under the plan. For example, if a plan does not permit individual investments, the notice need not include investment change language, but may include language about suspended rights such as loans or withdrawals.
The same blackout notice may be provided to address different restrictions. For example, a 25-day blackout for withdrawals and a 20-day blackout for investment changes may be addressed in the same notice.
The notice may be provided by electronic means, first class mail, certified mail, Express mail, designated private delivery service or hand delivery, including interoffice mail.
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Blackout notices are only required for plan level suspension of rights. Thus the suspension of an individual's rights due to a QDRO would not trigger the requirement for a blackout notice.
Related Links: Sample Blackout Notice from the Final Rules DOL Final Rules on Blackout Notices DOL Final Rules on Civil Penalties for Not Providing the Blackout Notice and for the Sarbanes-Oxley increases in the ERISA Civil Penalties.