If an employer is considering significant changes to a retirement plan,when must those changes (or potential changes)be communicated to employees and/or plan participants

Question

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When a firm considers modifying a retirement plan for its employees, it must be wary since the employees may have been making decisions in reliance on the original benefit plan. Even if a proposed plan offers greater benefits than those originally included, an employer has a fiduciary duty to notify all employees of the changes that might take effect once the employer gives the proposal "serious consideration." Where a plan is being given serious consideration, managers must truthfully and forthrightly offer the information to all employees. If notice of the possible changes are not given to employees, the firm should make eligibility for plan participation retroactive to the date of serious consideration.

If an Employer Is Considering Significant Changes to a Retirement