401(k) Pension Plan: Annual Disclosure Mailing

NRECA is mailing important 401(k) Pension Plan notices the week of October 17, 2022. The notices are being sent to all cooperative employees, plan participants and beneficiaries who are eligible to make or change investment elections in the 401(k) Plan. Federal regulations require 401(k) plans to distribute disclosure notices to these individuals. Included in the mailing are the following:

1. Participant Fees Annual Disclosure Notice providing general plan information, as well as information on administrative and individual expenses, investment options, fund performance and fees as of December 31, 2021;
2. Qualified Default Investment Alternative Notice informing participants who have not yet made active investment selections that their balance, or a portion of their balance, as well as ongoing contributions will default (or have been defaulted) into the Target Date Portfolio (TDP) option(s) closest to the year of their target retirement, assuming a retirement date age of 65. The notice also provides a brief overview of the TDPs as well as instructions for directing their 401(k) Plan investment allocations and future contributions;
3. Target Date Portfolios summary detailing relative risk, sector weightings, investment objectives and expense ratios for each TDP as of June 30, 2022;
4. 401(k) Pension Plan Commodity Pool Operator Disclosure Notice will be included in participant mailings until the summary plan description has been updated. No action is needed as a result of receiving this disclosure.

Background
The Commodity Exchange Act regulates agricultural commodities and financial futures, including futures contracts used by stock and bond funds for hedging purposes. Under the Commodity Futures Trading Commission (CFTC) regulations, any investment fund that invests in future contracts is potentially classified as a “commodity pool,” and any person operating a commodity pool could be considered a “commodity pool operator,” required to be registered and regulated by the CFTC. There are statutory exclusions available for certain entities. Periodically, the NRECA Insurance & Financial Services Committee may pursue trades of futures or options on futures on behalf of the 401(k) Pension Plan. The committee, as named fiduciary of the plan, has claimed an exclusion from the definition of the term “commodity pool operator” under the Commodity Exchange Act, and therefore, is not subject to registration or regulation as a pool operator under the act. This notice is provided to all participants, whether existing or prospective, pursuant to 17 CFR § 4.5(c)(2). This disclosure is a requirement of the statutory exclusion.

Ongoing Distribution
Once your co-op’s benefits administrator enrolls a new employee, that individual will receive copies of the Participant Fees Annual Disclosure Notice, Qualified Default Investment Alternative Notice and Target Date Portfolio summary in their 401(k) Plan enrollment confirmation kit.

Copies of the annual disclosure notices and Glossary of Investment Terms are available on the Employee Benefits website under Education & Resources > Retirement Plan Documents. The fund profiles, holdings and individual disclosure documents are also available on cooperative.com/401kinvestments.

If you have questions about these notices, please contact your field representative or NRECA’s Member Contact Center at 866.673.2299, or via email at contactcenter@nreca.coop. Representatives are available from 7 am to 7 pm, Central time. Co-op employees with questions about their investment strategy should contact NRECA’s Personal Investment & Retirement Consulting team at 866.673.2299, option 6 or via email at pirc@nreca.coop.