Which of the following statements about the Summary Annual Report is accurate?

The Summary Annual Report (SAR) serves as a way for plan sponsors to provide important information about a 401(k) plan’s financial status to participants. One of the critical aspects of the SAR is that it must be distributed to participants within a specified time frame after the end of the plan year. Specifically, the report must be sent within nine months following the end of the plan year, which aligns with federal reporting requirements.

This timely distribution is essential as it keeps participants informed about the performance and funding status of their retirement plan, ensuring transparency and compliance with regulatory standards. By providing this information within the necessary time frame, plan sponsors help facilitate informed decision-making by plan participants regarding their retirement savings. Understanding this timeline underscores the importance of timely communication and compliance in retirement plan administration.