Can Plan Sponsors Send Documents Electronically Right Away?

Experts from Groom Law Group and Cammack Retirement Group answer questions concerning retirement plan administration and regulations.

“Now that the Department of Labor (DOL) has released its final rule on e-disclosure, can I go ahead and work with my recordkeeper to start sending covered documents to participants immediately?”

Stacey Bradford, Charles Filips, David Levine and David Powell, with Groom Law Group, and Michael A. Webb, vice president, Retirement Plan Services, Cammack Retirement Group, answer:

Not quite, keep in mind that covered individuals must be furnished an initial notification on paper informing participants of the new electronic delivery method, the electronic address that will be used, and the right to opt-out of e-disclosure and request paper copies of covered documents. The initial notice must be MAILED to participants before the electronic delivery of covered documents can take place. So you can’t just go ahead and start sending documents to everyone electronically.

Now, you can send out this initial notice immediately. However, assuming that your recordkeeper or third-party administrator (TPA) will be mailing this notice, it may not be ready to do so right now, as the effects of the COVID-19 pandemic, could make a mass mailing impractical or even impossible at present. You also need to make certain that the recordkeeper/TPA has the proper infrastructure in place so that participants can easily access and read covered documents electronically in accordance with the provisions of the final rule.

However, the rule represents a tremendous opportunity to reduce paper, administrative effort, and expenses, so plan sponsors who wish to adopt the new voluntary safe harbor in the final rule (and incidentally, the old 2002 safe harbor is still available as well) should commence discussions with their recordkeeper/TPA as to how they can implement the safe harbor as efficiently and expediently as possible.


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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