The number of notices and disclosures required to retirement plan participants has increased while methods to access information changed drastically. Many people receive their news and information on electronic devices through apps and social media. What remains the same is the Department of Labor’s (DOL’s) guidance about permissible methods to provide notices electronically. There is a disconnect between how people are accustomed to receiving information (electronically) and what is permissible under ERISA.
What Disclosures May Be Distributed Electronically under the DOL Safe Harbor?
A comprehensive guidance – and safe for plan fiduciaries – is the safe harbor for electronic delivery provided in DOL regulations. The safe harbor includes the documents required to be furnished by ERISA including, but not limited to:
Who May Receive Documents Electronically?
There are two categories of individuals who may receive disclosures electronically:
How Must Employers Distribute Notices Electronically under the Safe Harbor?
Employers must be conscious of how they provide required disclosures. Many use their company website to post them. While this is allowable, the following additional rules must be met:
Should Employers Consider Electronic Distribution of Notices?
Absolutely! Technology is inescapably pervading every facet of our lives. While there are a few requirements to abide by, there are vast benefits to electronic delivery including cost savings (no more paper/postage to purchase, labor savings, etc.), environmental consciousness, quicker dissemination of information, higher likelihood of readership and overall more efficient retirement plan operation. Ask your plan advisor to add “electronic participant notice distribution” to your next retirement committee meeting agenda.