Separated Participant Communications
Helping separated participants understand their distribution options so they can make important money decisions for their financial future.
Program details
What are the goals of this program?
Our goal for this communications program is to help separated participants understand the distribution options they have for the money in their Fidelity workplace retirement savings account with a former employer so they can make an informed decision about what to do with their savings. We hope these triggered email communications will provide robust and easy-to-understand educational resources that will truly help participants manage their money during important—and often emotional—life moments (e.g., experiencing a job change or retirement).
When will these communications be sent?
Changes to a participant's status code will automatically trigger these communications.
Who will receive these communications?
The communications outlined in the chart below will be sent to separated participants who meet the following criteria:
- Age 18+
- T or R status code
- For newly separated participants (separated less than 30 days), balance thresholds are based on the 402(f) balance threshold and can vary by plan, but most are ≥ $1,000
- For tenured separated participants (separated longer than 30 days), the balance threshold is > $100
What messages will participants receive?
The program features a multiple-touch email communications stream (using participant-provided email addresses). Touch 1 is sent by email, with print backup for participants that haven’t provided a valid personal email address. All of the subsequent communications are email only. See the chart below for a breakout of the touches.
This program also works in conjunction with plans that have Auto Portability, as well as the NetBenefits® Distribution Options Guided Experience. See below for more information.
Understanding Touch 1/Day 1 402(f) Special Tax Notice
Touch 1 is a legally required communication that includes the 402(f) “Special Tax Notice,” a document that explains what a separated participant’s tax obligations are if they decide to move the money in their workplace retirement plan account from a former employer. Visit the “Retirement Plans” section of the IRS.gov website to learn more.
The 402(f) tax notice is sent by email, with print backup for participants that haven’t provided a valid personal email address. The balance requirement for the 402(f) is typically ≥ $1,000 (setup during plan implementation), but may vary by plan. The newly separated communications will leverage the same balance threshold as the plan’s 402(f) notice.
*Separated participants who continue to have > $100 in their account after 30 days will receive touch 5 at 6 months (180 days) after their initial separation date and again each year after that if no action is taken. Participants who make a “Stay in Plan” selection in the NetBenefits® Distribution Options Guided Experience will receive a “Stay in Plan” email the day after and no longer receive any additional separated participant communications for that account. Learn more about the NetBenefits® Distribution Options Guided Experience.
For plans that have adopted Auto Portability
Workers with a T status who are in an Auto Portability enabled plan and meet the Auto Portability eligibility criteria (balance < $7,000) will receive an additional email on Day 1 to notify them of their potential eligibility for the Auto Portability service. They will continue to receive future communications containing relevant information regarding their eligibility, until/unless the participant opts out of Auto Portability, or if they rollover or cashout the money in their account on their own.
Visit this toolkit for Auto Portability education materials to share with your workers.
What is the call to action?
All instructions vary based on message, include a digital-first approach and link to support, education, and tools available on NetBenefits®. The primary call to action for both the job change and pre-retiree/retiree email streams will direct participants to targeted content that helps them understand their distributions options. For example:
- If the plan has Auto Portability and the participant meets the Auto Portability account requirements (balance < $7,000), they will be sent to a NetBenefits® article to learn about Auto Portability and their other distributions options.
- If the participant has ≥ $8,000, they will be sent to the NetBenefits® Distribution Options Guided Experience.
- If the participant has < $8,000 and is not eligible for Auto Portability, they will be sent to the respective default NetBenefits® article (links below) that talks about their 4 distribution options.
A toll-free phone number for 1-to-1 support will be included in the newly and tenured termed emails for Advice-eligible plans as a secondary call to action. Education-only plans will not be directed to call.
Additional Resources
You can distribute these resources to further educate your workers about their distribution options.