[co-author: Ihsan Walker]
SECURE 2.0 has changed the game again by helping employers save time and money by eliminating certain notifications sent to unregistered employees.Sponsors used to have to send a lot of paperwork Disclosure of Retirement Benefits and Benefits We intend to cover both registered and unregistered attendees, but that is no longer the case. The new law removes the obligation to distribute these. IRS ERISA will notify unregistered participants. An unenrolled participant is an eligible employee who has not elected to participate in a workplace retirement plan.
However, these participants cannot be completely forgotten. In order to facilitate participation, the Sponsor must provide the unenrolled employee with an annual reminder notice of his eligibility to participate in the plan and upon request he may provide other required notices such as SPD, SMM, SAR or Documentation must be provided. This must be done during the annual open season election period or during an appropriate period prior to the start of each plan. Additionally, to be eligible for this relief, an unregistered participant must have been granted an SPD at the time he qualified.
This exception does not apply to unenrolled participants who are eligible for employer-sponsored non-selective benefits. For example, if your plan makes profit-sharing contributions, employees covered by those contributions are not eligible for this relief, even if they have not deferred. However, if the employer’s contributions are match only and the employee does not elect to defer, the employee will be considered an unenrolled employee eligible for this relief.