Electronic Delivery of Retirement Plan Notices Could Become Easier

In October 2019, the U.S. Department of Labor (DOL) published proposed regulations regarding default electronic disclosures by retirement plans under the Employee Retirement Income Security Act of 1974 (ERISA).

The proposed rules offer a look at what the DOL is thinking of doing to ease the administrative and financial burden of providing paper disclosures to plan participants and beneficiaries. Anyone wishing to comment to on the proposed rule to the DOL has until November 22, 2019 to do so.

Electronic Delivery of Retirement Plan Notices Could Become Easier

Background on ERISA Requirements

Title I of ERISA requires retirement plan administrators to furnish specific information to participants and beneficiaries. This includes:

  • Summary Plan Description (SPD)
  • Summary of Material Modification (SMM)
  • Summary Annual Report (SAR)
  • Annual Funding Notice
  • 404(a)(5)/404(c) Disclosure
  • Annual Qualified Default Investment Alternative (QDIA) Notice
  • Blackout Notice
  • Pension Benefits Statement.

When furnishing these documents, ERISA requires plan administrators to use delivery methods reasonably calculated to ensure actual receipt of information by participants, beneficiaries and other individuals. Deliveries by hand to employees at the workplace or by first-class mail are acceptable methods.

Currently, the DOL allows administrators to distribute the information in electronic form instead of paper to participants who can effectively access the electronic documents at their workplace. For those who do not have access to the electronic documents at their workplace, the DOL allows plan administrators to provide this information electronically only if the participant or beneficiary affirmatively consents to electronic delivery. In other words, participants and beneficiaries can opt in to electronic delivery, but the information must be provided on paper to anyone who does not opt in and does not have access to electronic documents at their workplace.


What Would Change Under the Proposed Rule?

In addition to delivering information through the methods described above, the October 2019 proposed rule would allow retirement plan administrators to send required information electronically even if a participant or beneficiary does not affirmatively opt in. However, if participants or beneficiaries opt out of electronic delivery, the plan administrator must send the information by another delivery method reasonably calculated to ensure actual receipt of information, such as first-class mail or by hand.

In any case, when someone specifically requests these documents, the administrator must still provide a paper version.

The proposed rule outlines a number of specific and technical requirements plan administrators would have to abide by in order to be able to send information electronically without an affirmative opt-in. These requirements are about mandatory availability notifications, timing, accessibility, electronic addresses and technical requirements.

Retirement plan sponsors should wait for final regulations from the DOL before making any changes to how they deliver specific required information.

Note: The proposed rule applies only to retirement plans, not to health and welfare plans. The DOL might extend similar rules on electronic delivery to health and welfare plans in the future.

Learn more about the proposed changes for the electronic delivery of retirement plan notices in the resources listed below:

Lois Gleason, CEBS
E-Learning/Online Course Instructional Designer at the International Foundation

Developed by International Foundation of Employee Benefit Plans staff. This does not constitute legal advice. Consult your plan professionals for legal advice.

Trustees and Administrators Institute

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Lois Gleason, CEBS

Instructional Designer at the International Foundation  Favorite Foundation Product: Employee Benefits Survey (conducted every two years; it is very comprehensive). Benefits-Related Topic Top Picks: The changing landscape of America’s costly health care system, ERISA compliance, retirement decumulation strategies. Favorite Things About Working at the Foundation: My co-workers and how much they care about the quality of their work product. I also love, love, love all the windows in our office with their beautiful views of trees and sky. Personal Insight: I am constantly reading. I can relate to the flaws, strengths, and silly inconsistencies found in the characters of classic novels like Middlemarch, North and South, and A Tale of Two Cities. I also read the daily newspapers every morning at breakfast–and yes, I still get the paper versions. Because it’s no big deal if a little coffee spills on them.

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