The Labor Department has issued its much-awaited proposal that would modernize retirement disclosures by providing a new safe harbor for employee benefit plan administrators to use electronic delivery for participant notices and disclosures. “The proposal, if adopted, would allow plan administrators who satisfy specified conditions to provide participants and beneficiaries with a notice that certain disclosures will be made available on a website,” DOL said. “Individuals who prefer to receive these disclosures on paper will be able to request paper copies and to opt out of electronic delivery entirely.”
Under the proposal, plan administrators under the Employee Retirement Income Security Act that wish to rely on the existing safe harbor for electronic delivery—or to continue furnishing paper documents—may continue to do so. The new proposed safe harbor would feature a “notice and access” structure under which disclosures would be posted to a public website and participants notified electronically about these documents. Participants would be able to opt out of electronic delivery and choose to receive paper documents.
If finalized, this proposal would provide what the American Bankers Association has long advocated: electronic delivery as the default method of delivery, making retirement plan disclosures and notices more efficient and useful for retirement savers, and less burdensome and costly for banks and other retirement services industry providers. Comments are due by Nov. 22. For more information, or to provide feedback for ABA’s comment letter, contact Tim Keehan.