RETIRE Act Aims to Simplify Electronic Communication

Are you an employer who needs to deliver retirement plan information to employees? Do you want to save costs by sending documentation electronically, but you’re constantly being dragged down by onerous regulations?  Well now, there’s a better way! Meet the Receiving Electronic Statements to Improve Retiree Earnings (RETIRE) Act.

The RETIRE Act is bipartisan legislation cosponsored by Rep. Jared Polis (D-CO) and Rep. Phil Roe (R-TN). Its purpose is to simplify the process by which employers can provide retirement plan information electronically. Despite growing use of the internet, current regulations that allow employers to legally send electronic communication are not user-friendly.

RETIRE Act Aims to Simplify Electronic Communication

Here’s the process. First, the employer has to send employees an Initial Notice. It requests that the employee voluntarily provides the employer with an e-mail address and it must state that if an e-mail address is provided, the employer will then send disclosure statements, notifications, or other important documentation to the employee electronically, unless the employee specifies that he or she wants to continue to receive paper copies of this information. The emphasis here is on the word voluntary since employees are entitled under the regulations to receive information in any form they desire, including a paper form free of charge.

If employees provide their e-mail addresses for electronic receipt of documentation, employers must then send a yearly Annual Notice to employees with the same information originally provided in the Initial Notice. This Annual Notice must be provided in paper form unless the employer can determine that there was “electronic interaction” with the employee, in which case it may be sent electronically.

I’ll save you the energy of reading any more of the specifics (although can look at them yourself here, but suffice it to say, the regulations make me, and probably many employers feel a lot like this.

The purpose of the RETIRE Act is to simplify the regulations already in place and allow for employers to create a system that provides easy access to electronic documentation. Employers can do this by sending documentation directly to an employee’s e-mail address, posting material to a website that an employee has access to (as long as there is proper notification of the posting), or create an electronic system where documentation is “reasonably calculated to ensure actual receipt” by the employee. This system must allow the employee to select between the various electronic options available, and one of those options must be receiving paper versions of documentation at no additional cost.

In addition to establishing a new electronic delivery system, the RETIRE Act also requires employers to provide certain protections to employees. First, employers must protect the confidentiality of personal information related to the employee’s accounts. Second, administrators have to provide a paper notice that highlights the employee’s current method of receiving notifications with a statement that says that the employee has a right to change that method at any time. Third, electronically delivered documents do not have to be exact replicas of the paper versions, but they still have to be readable and contain all of the same content.

The RETIRE Act isn’t law yet (feel free to watch this if you’re confused on how bills become law), but with bipartisan support, hopefully, employers will have the chance to streamline electronic delivery to a retirement plan near you.

Adam Abelson
Adam Abelson
Associate Director, Educational Programs at the International Foundation

Comments (2)

  1. Vincent Pascale

    Well, it’s about time.

  2. Maurice Hodos

    Thanks for adding a little humor into our regulation landscape. And BTW, you didn’t have to opt in to receive this comment.


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