On May 27, 2020, the Department of Labor (DOL) published its final rule on Default Electronic Disclosure by Employee Pension Benefit Plans Under ERISA, establishing a new alternative safe harbor that allows benefit plan administrators to provide ERISA retirement plan disclosures to plan participants via email, website posting, or mobile app with relaxed requirements. Those who still wish to receive hard copies of disclosures may opt out of electronic delivery and receive paper copies. Notably, this new rule does not apply to health and welfare plan disclosures.

Plan Document Delivery

Under the new rule, plan administrators may provide documents and information electronically as follows:

Electronic address – ERISA Retirement plan disclosures may be sent directly to email addresses or smartphone numbers of participants. When using email, the document may be sent as an attachment or in the body of the email.

Website or Mobile App – ERISA retirement plan disclosures may be posted on a website or through a mobile app if a Notice of Internet Availability (NOIA) is provided to covered individuals. These disclosures must stay on the website or app for at least one year, and they should remain until they are replaced by a new version.

Electronic Address Delivery Standards

Electronic addresses include either email or smartphone numbers. Before relying on the new safe harbor, participants must first receive an initial paper notice stating that some or all disclosures will be provided electronically. This initial paper notice must be written so that it is understood by the average plan participant and must include:

  • Identification of the electronic address that will be used for the participant;
  • Instructions for how the participant can access the disclosures;
  • A statement that informs the plan participant of his or her right to request a free paper copy of the document with instructions on how to do so;
  • A statement that informs the plan participant of his or her right to opt out of electronic delivery and receive a free paper copy of the document with instructions on how to do so; and
  • A notice that the plan document is not required to be on the website for more than one year once it is replaced by a new version.

When using email, a plan administrator must send communications to an individual’s email address that is either (1) provided by his or her employer; or (2) provided directly by the plan participant.

The email must be written so that the average plan participant understands it, and it must include:

  • A subject line that says, “Disclosure About Your Retirement Plan”;
  • If the plan information is sent as an attachment, an attachment which must be labeled with a name;
  • A brief description of the attachment if the name alone is insufficient to communicate the nature of the attachment;
  • A statement that informs the plan participant of his or her right to request a free paper copy of the document with instructions on how to do so;
  • A statement that informs the plan participant of his or her right to opt out of electronic delivery and receive a free paper copy of the document with instructions on how to do so; and
  • A contact phone number for the plan administrator or other representative.

In addition, plan administrators are responsible for ensuring that the electronic delivery system in use is capable of flagging invalid electronic addresses. If an electronic address is found to be invalid, the administrator must either obtain the correct electronic address or treat the covered individual as having opted out of electronic delivery and send a paper copy of the document in a timely manner.

Website and Mobile App Delivery Standards

To provide disclosures via a website or mobile app, plan administrators must notify covered individuals that plan documents are available by sending them a Notice of Internet Availability (NOIA). The NOIA must be written so that it is understood by the average plan participant and must include the following:

  • A prominent subject line, title, or legend that reads, “Disclosure About Your Retirement Plan”;
  • A statement that reads, “Important information about your retirement plan is now available. Please review this information”;
  • The document name or brief description if the name alone is insufficient to communicate the nature of the document;
  • The website address or hyperlink to the address where the plan document can be found;
  • A statement that informs the plan participant of his or her right to request a free paper copy of the document with instructions on how to do so;
  • A statement that informs the plan participant of his or her right to opt out of electronic delivery and receive a free paper copy of the document with instructions on how to do so;
  • A notice that the plan document is not required to be on the website for more than one year once it is replaced by a new version; and
  • A contact phone number for the plan administrator or other representative.

The new E-Disclosure Final Rule is effective on July 27, 2020. However, the DOL states that plan administrators will not be penalized for relying on this new safe harbor before that date.

Hall Benefits Law ensures that clients’ employee benefit plans and related processes and procedures are updated to stay in compliance with ERISA and all applicable laws. To speak to a team member, call us today at 678-439-6236.

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