DOL Issues Information on Electronic Distribution of Retirement Plan Notices

Effective July 27, 2020, the Department of Labor (DOL) issued a new rule that provides an additional safe harbor for distribution methods for electronic disclosure of retirement plan notices. This new safe harbor does not apply to group health plans at this time but may in the future. Summary Plan Descriptions (SPDs) are an example of a required document under the distribution requirement of Title I of the Employee Retirement Income Security Act of 1974 (ERISA) that this new rule may affect.  This safe harbor rule does not apply to documents that must be furnished upon request or auto enrollment notices. The DOL expects this rule to enhance the effectiveness of ERISA disclosures and significantly reduce the costs and burden associated with furnishing many of the recurring and most costly disclosures.

This new rule has provided new safe harbor distribution methods of email delivery and notice-and-access process.  Plan administrators must first notify recipients of their right to opt out of electronic disclosure to take advantage of the new safe harbor distribution methods.  This notice must be a hard copy and include:

  • Email address that will be used for the individual
  • Any instructions necessary to access the covered documents
  • Disclosure to the recipient of their right to opt out of electronic delivery for all covered documents and to receive paper only versions at no cost. Including an explanation of how to exercise this right.
  • If using the notice-and-access process, a cautionary statement that the covered document is not required to be available electronically for more than one year (or, if later, after it is superseded by a new version)

After supplying the initial notice, there are two alternatives for employers: directly email disclosure or notifying the individual of the posted disclosure and posting it on a website.

The covered document can be permanently kept in an electronic format.  The document must be available by the ERISA deadline date and remain available for at least one year (even if it is superseded by a new version), presented in an easily understood manner, and presented in a widely available format that can be printed, electronically searched or read online.

Plan administrators must notify recipients of each disclosure that was posted.  They must explain how to access it, which document was posted, and explain that it is not required to be posted for longer than one year.  This notification must include the phone number of the plan administrator and the following statements: “Disclosure About Your Retirement Plan” and “Important information about your retirement plan is now available.  Please review this information.”

If the plan administrator chooses to email the documents, they must make the subject line “Disclosure About Your Retirement Plan.”  Confidential information in the email must be protected under reasonable measures.

Current service contracts, internal and external procedures, and policy language should be evaluated and updated to reflect any changes necessary to comply with the DOL requirements.