How Often Do 401(k) Providers Have to Send Out Benefit Statements?

The IRS requires 401(k) providers to send out account statements regularly.

The IRS requires 401(k) providers to send out account statements regularly.

The cash in your 401(k) is intended to pay for your golden years, but wise investors keep tabs on their nest egg in the years before their retirement. Unlike investments that you hold and manage, a 401(k) fund is held and operated by a third party. To keep investors informed, and eliminate any nasty surprises at retirement, a provider must periodically update investors about the condition of their retirement savings.

Frequency

The Internal Revenue Service requires plan providers to send out a benefit statement to each participant in a 401(k) plan at least once a year, although the law allows them to set the notification schedule. If you request a copy of your statement in writing at any time, your provider must comply with the request, although he's only bound to give you a statement by request once each year. If your 401(k) gives you the option to direct your own investments, your plan must provide you a statement every three months.

Method

Your provider has a bit of wiggle room in deciding how to give you those benefit statements. Plan administrators can send paper statements through the mail or distribute notifications electronically. Several options for electronic reporting may be used, from emailing notifications to providing reports on a secure website.

Leaving Your Job

Leaving your job usually means packing up your things and enjoying a slice of cake at your send-off party. While it's only natural to be focused on your new job, don't write off your ties to the company. Your employer must give you a benefits statement that wraps up your 401(k) contributions and balance shortly after you leave. Depending on the type of plan and under what conditions you left the company, your plan administrator must provide you a statement within 90 to 180 days of your last day on the job.

Content

Your 401(k) statement must provide basic information about your retirement plan. The IRS requires each statement to include details such as the value of your account; the vested portion of this amount, or the slice you already own; and the value of each investment held in your 401(k). Providers must also warn workers about the risk of investing versus saving money, putting more than one-fifth of your nest egg in a single company's stock and not having a diversified retirement portfolio.

About the Author

Wilhelm Schnotz has worked as a freelance writer since 1998, covering arts and entertainment, culture and financial stories for a variety of consumer publications. His work has appeared in dozens of print titles, including "TV Guide" and "The Dallas Observer." Schnotz holds a Bachelor of Arts in journalism from Colorado State University.

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