Delay of Initial e-Disclosure Notice

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

I understand that the Department of Labor [DOL] recently announced that the one-time paper initial notice necessary to implement its new safe harbor on e-disclosure can be deferred due to COVID-19. Does that mean that I can just start sending covered documents electronically if I otherwise follow the new safe harbor?”

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

Not exactly. In informal comments about the issue, the acting secretary of the DOL’s Employee Benefits Security Administration (EBSA) clarified that the one-time initial notice qualifies for the relief provided in Disaster Relief Notice 2020-01. The notice provides that an employee benefit plan and the responsible plan fiduciary will not be in violation of the Employee Retirement Income Security Act (ERISA) for a failure to timely furnish notice, disclosure or document that must be furnished between March 1, and 60 days after the announced end of the COVID-19 National Emergency if the plan and responsible fiduciary act in good faith and furnish the notice, disclosure or document as soon as administratively practicable under the circumstances. Good faith acts include use of electronic alternative means of communicating with plan participants and beneficiaries who the plan fiduciary reasonably believes have effective access to electronic means of communication, including email, text messages and continuous access websites.

Thus, as part of the “good faith” efforts described above, the initial notice can indeed be emailed, instead of sent via paper, as long as there is a good-faith confidence that that communication will be received. However, a follow-up paper notice must be sent prior to 60 days following the conclusion of the COVID-19 National Emergency, since the deadline to send a paper notice was merely delayed, not eliminated.


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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