Default Electronic Disclosure by Employee Benefit Plans Under ERISA
Published on by Eric Goodman in Assurance, Benefit Plan Audits
On May 21, 2020, The U.S. Department of Labor (DOL) adopted a new, additional safe harbor for plan administrators to use electronic media, as a default, to furnish covered documents to participants and beneficiaries. Plan administrators will no longer have to send potentially large volumes of paper documents through the mail. The safe harbor allows plan administrators, that satisfy specified conditions, to provide participants and beneficiaries with a notice that certain disclosures will be made available on a website, or to furnish disclosures via email. Additional provisions and features of the safe harbor plan include:
- Plan administrators may post covered documents on a website if appropriate notification of internet availability is furnished to the electronic addresses of covered individuals.
- Plan administrators may send information directly to the electronic addresses of covered individuals, with the covered documents either in the body of the email or as an attachment to the email.
The new safe harbor is effective and applicable beginning on July 27, 2020. Plans that rely on the new safe harbor rule will be able to eliminate significant materials, printing, and mailing costs associated with furnishing printed disclosures. In addition, as an enforcement policy, the DOL will not take any enforcement action against a plan administrator that relies on this safe harbor before that date, which provides flexibility and may reduce administrative burden on employers and pension plan service providers during this unprecedented time.
The final safe harbor rule reflects the reliance on a wide variety of sources of evidence concerning individuals’ access to, and use of, electronic media in the United States. Some facts found in recent surveys and information gathering efforts by the DOL include:
- A 2019 survey found that 90 percent of U.S. adults use the internet.
- A 2017 survey estimated that 97 percent of the U.S. population lives in a home with a broadband internet subscription.
Click here to read the final DOL rule.
If you have questions or need assistance with interpreting or applying safe this harbor for plan administrators, and whether this plan could benefit your company, Barnes Dennig can help. For additional information please call us at 513-241-8313 or click here to contact us. We look forward to speaking with you soon.