Blackout Period

What Does Blackout Period Mean?

A blackout period is a temporary period, typically lasting about 60 days, during which an individual has limited or no ability to make changes to their investment or retirement plans. For group benefits offered by employers, blackout periods must be transparent and cannot occur unless they are announced in advance.

Insuranceopedia Explains Blackout Period

Blackout periods on group benefits restrict the recipient’s access to what is owed to them. However, the goal is not to simply inconvenience them; rather, these periods are designed to prevent corporate insiders from unfairly benefiting (intentionally or unintentionally) from stock market trades.

Annuities held inside retirement plans are commonly affected by these freezes, since contract changes or fund transfers can lock the account for weeks. If you are researching what annuities are and how they work, it helps to know when you can and can’t move money in or out.

Blackout periods can also arise from company restructuring or changes to benefit plans. For example, there may be a blackout period while assets are transferred from one financial firm to another.

A corporation may impose a blackout period solely on key executives or apply it more broadly to a group of employees. Group benefits often include employer-provided life insurance, and when a company moves its plan to a new carrier, the blackout can also pause changes to coverage amounts or beneficiaries. Employees who want more control sometimes pair group coverage with their own permanent life insurance policy, which isn’t tied to the employer’s plan calendar.