DOL Proposed Rule – Retirement Plan Disclosures Online

The U.S. Department of Labor (DOL) announced a proposed rule on October 22, 2019, to permit retirement plan disclosures to be posted online.  The proposed rule is in part a response to an August 2018 Executive Order requesting the DOL to find broader use of electronic delivery to improve delivery effectiveness and save time and money.  The proposed rule offers more disclosure options, which benefit retirees, employees, and employers, and provides a modern solution for participants who want to view retirement plan disclosures on a webpage rather than receiving a large number of papers in the mail.  

Plan participants will be notified about information available on a website, as well as instructions for access, how to print the information, and protections for those viewing the disclosures electronically.  This will expand on the original electronic disclosure safe harbor from 2002 which only allowed disclosure to employees who had email addresses provided by the employer.

ERISA requires plan administrators to send out multiple documents to participants and beneficiaries every year.  Currently, plan administrators are required to use conventional mail to best ensure actual receipt of the documents.  The new proposal saves money for employers and fund administrators by reducing printing and mailing costs, and viewing documents online is more time efficient for participants, who based on recent surveys have nearly universal access to the internet.

The proposed rule provides plan administrators an option to notify the participants via electronic address of the availability of online information.  An email would be sent notifying the participants about the documents posting, including a description of the information contained in the documents and where the documents can be found.  Instructions to request a free paper copy or to elect paper delivery in the future must also be included.

Using electronic delivery as the default method is only allowed if the plan administrator has an electronic address for the participant and the participant has first been notified by paper of the upcoming use of the electronic delivery method.  Participants with lack of access to the internet or who choose paper delivery cannot be required to view notices on the website.

At this time, the proposal is only for retirement plans, but there is room in the proposal to set up something similar for health and welfare plans.