Blackout Period

What Does Blackout Period Mean?

A blackout period is a temporary period, usually about 60 days, during which a person has limited or no ability to make changes to their investment or retirement plans. Blackout periods on group benefits offered by employers must be made transparent: they are not permitted unless they are announced ahead of time.

Insuranceopedia Explains Blackout Period

Blackout periods on group benefits restrict the recipient's access to what is owed to them. However, the intention is not simply to inconvenience them. Rather, these blackout periods are meant to prevent corporate insiders from unfairly benefiting (whether intentionally or not) from trades in the stock market.

Blackout periods can also result from a company restructuring or altering their benefit plans. There may, for instance, be a blackout period while the assets are being transferred from one financial firm to another.

A corporation may impose a blackout period on its key executives only, or it may apply it more broadly to a group of employees.