What Does the Proposed New Rule on Paper Statements Require?

Q: I heard that there is a new requirement for retirement plan sponsors to send paper statements as opposed to electronic statements. Does this mean our 403(b) plan must issue paper statements to those who have already elected to receive statements electronically?

Kimberly Boberg, Kelly Geloneck, Emily Gerard and David Levine, with Groom Law Group, and Michael A. Webb, senior financial adviser at CAPTRUST, answer:

A: Your question relates to the proposed rule DOL published in February, which provides guidance on the implementation of the SECURE 2.0 Act of 2022 for the 2002 and 2020 electronic disclosure safe harbors. Among other things, Section 338 of SECURE 2.0 generally requires that, beginning in 2026, participants in 403(b) and other defined contribution retirement plans issue paper statements to participants at least once each calendar year, and once every three calendar years for defined benefit plans.

The proposed rule exempts sponsors who utilize the 2002 safe harbor from the annual paper statement requirement, provided they satisfy a new initial notice requirement and permit an electronic disclosure opt out election. This safe harbor covers employees who are “wired at work” and those who have affirmatively consented to receive electronic communications. To avoid duplicative disclosures, Paragraph (c)(3)(ii) allows the existing advance statement (the notice required for affirmative consent under the 2002 safe harbor) to satisfy the new initial notice requirement, provided it is furnished on paper. This new requirement is applicable after plan years beginning after December 31, 2025. Thus, a sponsor is not required to issue paper statements if an existing participant already made an affirmative election to receive electronic statements prior to January 1, 2026.

NOTE: This feature is to provide general information only, does not constitute legal advice and cannot be used or substituted for legal or tax advice.

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