March 09, 2018

ERISA Tips: Remember Auto Delivery of Prospectuses to Participants Not Required, BUT…


Remember that the automatic prospectus delivery requirement has been eliminated, but the Securities and Exchange Act requires that 403(b) and 457(b) plan prospectuses be delivered.

Editor’s Note: ERISA Tips is a new feature for the 403(b) Advisor. It is provided with you in mind — to make the newsletter more useful to you! If you have any content for ERISA Tips or the 403(b) Advisor that you would like to contribute or suggest, please contact John Iekel, editor of the 403(b) Advisor, at

This tip is taken from Michael Webb’s article “The Top Five Things You Need to Know About ERISA 404(c),” which originally ran on Nov. 21, 2014.

One of the many changes brought about by the replacement of the disclosure requirements of ERISA Section 404(c) with the requirements of Section 404(a)(5) was the elimination of the automatic prospectus delivery requirement. This is because the regulations under Section 404(a)(5) only require delivery of a prospectus upon participant request.

However, unlike 401(k) plans, 403(b) and 457(b) plans are subject to the Securities and Exchange Act of 1933, which requires that prospectuses be delivered simultaneous to or immediately preceding investment in securities subject to the registration requirement (e.g., variable annuities and mutual funds).

Important: It should be noted that this automatic prospectus delivery requirement exists regardless of ERISA status in the case of 403(b) plans.