On May 21, 2020, the Department of Labor (DOL) issued its final regulation permitting electronic delivery of retirement plan participant disclosures that must be furnished under Title 1 of the Employee Retirement Income Security Act of 1974 (ERISA). The electronic disclosure default is optional, simply providing an additional method of delivery, allowing plan sponsors to continue relying on the 2002 safe harbor for electronic delivery or provide disclosures in paper format through mail or hand-delivery, should they so choose.
A long time coming, the rule aims to make notices more accessible to employees, reduce the administrative burden for the employers, create efficiencies by leveraging technology, and potentially reduce plan costs. As a result, “electronic delivery” now includes both email delivery and website posting.
Although the plan administrator is relieved of some administrative burden, the following is required under the new rule:
- Initial notification by paper to all participants including:
- Information about new electronic delivery method,
- The participant’s email address on file that will be utilized for electronic delivery,
- Option to opt-out of electronic delivery, and
- Information about how to opt-out at any time, free of charge.
- Annual Notification of Internet Availability (NOIA) describing all notices available on the website with the option to opt-out of electronic delivery.
- Website retention of all electronic documents until there is a subsequent version, and for no less than a year.
- Upkeep of electronic addresses on file for active and terminated participants.
The final rule will go into effect 60 days following the May 21 publication in the Federal Register; however, the DOL has indicated it will not take any enforcement action against a plan administrator that relies on this safe harbor before that date. As always, if you have any questions, please reach out to your Pensionmark advisor. We are here to help.