EB Flash: DOL Finalizes New Electronic Disclosure Safe Harbor for Retirement Plans
The Department of Labor (DOL) today issued a final rule to promote and enhance electronic disclosures for retirement plan participants and beneficiaries under Title I of the Employee Retirement Income Security Act of 1974 (ERISA). The final rule is scheduled to be published in the Federal Register on May 27, 2020 and will be effective 60 days thereafter. However, due to the COVID-19 emergency, the DOL, "as an enforcement policy, will not take any enforcement action against a plan administrator that relies on this safe harbor before [the effective] date."
"The final rule allows retirement plan administrators to furnish certain required disclosures using the proposed 'notice and access' model. Retirement plan administrators also have the option to use email to send disclosures directly to participants," the DOL explains. "These administrators must notify plan participants about the online disclosures, provide information on how to access the disclosures, and inform participants of their rights to request paper or opt out completely. The new rule also includes additional protections for retirement savers, such as accessibility and readability standards for online disclosures and system checks for invalid electronic addresses." As was the case in the proposed regulations released in October 2019, the final rule does not extend to welfare benefit plans.
The DOL predicts the final rule will save employer plans more than $3 billion in administrative costs. "In addition to benefiting workers, this rule will immediately assist employers and the retirement plan industry as they face a number of economic challenges due to the COVID-19 emergency, including logistical and other impediments to compliance with ERISA's disclosure requirement," the DOL explains. "The rule will rely on widely available technology to keep workers and retirees informed about their plans, while still preserving the option to receive retirement information by mail."
The 152-page text of the proposed rule is posted here.
A Fact Sheet issued by the DOL is posted here.
A press release is posted here.
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