The New Commonsense Guide to Your 401(k): Rebuilding Your Portfolio From The Bottom up

Chapter 23. Information about Your Plan

YOU ARE ENTITLED to find out about how your plan works. Under the Employee Retirement Income and Security Act, or ERISA, each 401(k) plan administrator is required to file a summary plan description with the Department of Labor. Your employer is also required under ERISA to make the summary plan description available to plan participants. Each 401(k) plan participant must receive a copy of this booklet, which describes the plan in simple language, no more than ninety days after becoming a plan participant.

Your employer must provide an updated booklet every five years that includes all amendments and other changes to the plan. Some plan sponsors provide only what is legally required in this document, making it pretty dry reading. But others have chosen to use it as a basic communications tool, beefing up the information required by the government to supply additional information about the plan.

However your employer uses it, the booklet is one source of information that must be provided to you. It must convey certain basic information in a manner that can be understood by the average participant. And it must include technical information that you might need, such as the names of the trustee and administrator. It must also outline your legal rights.

Although you probably will not sit down with this document to read it cover to cover, you should know what it contains and keep it in a safe place with the other information from your 401(k) plan. ...