Summary Prospectus Users Still 404(c) Eligible

Plan sponsors got a bit of a roadmap from the U.S. Department of Labor’s Employee Benefits Security Administration (EBSA) about 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 could stay under 404(c) protection from the Employee Retirement Income Security Act (ERISA) by giving out the new summary prospectus, as the Securities and Exchange Commission (SEC) requires. 

“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 said.

The Summary Prospectus is a short-form document providing a summary of key information about a mutual fund in order for participants and beneficiaries to evaluate and compare plan investment options (see “SEC To Require Mutual Fund Summaries“).