The Department of Labor (DOL) announced a new safe harbor rule on May 21, 2020 allowing employers to post retirement plan disclosures online or via e-mail as a default to covered individuals. This will allow employers to reduce administrative expenses associated with sending large volumes of paper documents through the mail. In addition, this will make the disclosures more readily accessible and useful to plan participants and beneficiaries.
The new safe harbor rule allows the following as optional methods of electronical delivery:
- Website Posting – Plan administrators may post covered documents on a website if appropriate notification of internet availability is furnished to the electronic address of the covered individuals.
- Email Delivery – Plan administrators may send covered documents 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.
By using either of these optional methods, the plan administrator will be in compliance with the safe harbor and will satisfy their fiduciary responsibility under ERISA. Individuals who prefer to receive disclosures on paper may request paper copies of the disclosure and opt out of the electronic delivery entirely.
Plan administrators must provide the covered individuals an initial notification, on paper, stating the way they currently receive retirement plan disclosures is changing along with other requirements. This notification must be given to the covered individuals before the plan can use the new safe harbor.
The effective date of the new safe harbor rule is July 27, 2020. However, the DOL has indicated that they will not take any enforcement action against a plan administrator that relies on this safe harbor before that date.
For further information, please contact Kerri Walz at kwalz@vlcpa.com or 800.887.0437.
