DOL Issues Final Rules on 401(k) Blackout Periods

Starting this week, workers with 401(k) retirement plans received new federal protection with the Labor Department’s announcement of a law requiring plan administrators to provide 30 days’ notice of blackout periods.

Congress enacted the blackout rules as part of the Sarbanes-Oxley Act of 2002. The purpose of the law is to prevent workers from losing their retirement savings during blackout periods, as happened to Enron employees who were unable to access their accounts for weeks in the fall of 2001 because of a change in administrator.

Under the new rules, plan administrators must inform participants of the starting and ending dates of the blackout periods. In addition, the administrators need to provide the reason for the blackout and advise workers that they should evaluate their investment situation in light of the upcoming suspension.

Plan administrators who violate the law will face fines up to $100 per day per plan participant. The administrators are not required to notify the Labor Department of the blackout period.

In related action, the Securities and Exchange Commission has barred corporate executives from selling company stock or exercising options during blackout periods.

You may like these other stories...

Mike "the Situation" Sorrentino, one of the stars on the former TV show "Jersey Shore," is in the middle of…well, a tax situation.On October 23, the erstwhile reality show attraction was arraigned...
Deal to lock in US tax cuts is bubbling up on the HillSome US lawmakers are exploring a post-election deal that would lock in permanent tax cuts for major corporations and low-income families, Richard Rubin of Bloomberg...
For many individuals, a key part of their investment and estate planning is to write yearend checks for gifts to family members. The following reminders will help put your tax planning in perspective for 2014 and beyond, and...

Already a member? log in here.

Upcoming CPE Webinars

Nov 5Join CPA thought leader and peer reviewer Rob Cameron and learn ways to improve the outcome of your peer reviews while maximizing the value of your engagement workflow.
Nov 18In this session Excel expert David Ringstrom, CPA tackles what to do when bad things happen to good spreadsheets.
Nov 19How do you minimize redundant work and unnecessary steps to maximize the amount of work moving through your firm?
Nov 20Kristen Rampe will share how to uncover new opportunities with your clients by asking powerful questions.