The Sarbanes-Oxley Act amended section 101 of the Employee Retirement Income Security Act of 1974 ("ERISA"), 29 U.S.C. § 1021, to require that the plan administrator of an individual account plan (such as a 401(k) plan) provide 30 days advance notice to affected participants and beneficiaries of any "blackout period" that restricts the ability of participants and beneficiaries to direct investments, request loans or request distributions under the plan for a period of more than three business days. (The term "participants" is used throughout the remainder of this Legal Alert to refer to both participants and beneficiaries.)
The notice requirement is generally effective for blackouts occurring on or after January 26, 2003. On October 21, 2002, the Department of Labor ("DOL") published interim final regulations that established guidelines for advance notice to participants of blackout periods under defined contribution plans. On January 24, 2003, the DOL finalized these regulations
