The DOL recommends that plan administrators immediately identify computer systems needed for plan operations and determine who is responsible for those systems. Procedures should then be established to create workable strategies to address the Y2K Bug, with an eye toward fixing any problems by mid-1999. The plan administrator should quickly fix those systems under its direct control. Another issue to consider is the likelihood of Y2K-related litigation by plan participants and the availability of insurance to cover any liability incurred. The attorneys and professionals at Mintz Levin have been at the forefront of the Y2K issue generally and are available to assist plan administrators with legal aspects of the problem.
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An annual notice advising each participant of individual deferral rates and of the right to discontinue participation is also a good idea. If certain requirements are met, allowing participants to self-direct their investments protects plan sponsors and other fiduciaries from liability for imprudent investment decisions by participants. Using default investment elections means these protections will be lost. Some states, like Massachusetts, require an explicit written consent by an employee for any deductions from wages. Failure to carefully consider whether fees are fair may be a breach of fiduciary duty.