“In an Ask the Experts column from last summer, the Experts stated that the use of a letter/postcard with a website link to a Summary Plan Description (SPD) or other Employee Retirement Income Security Act (ERISA)-required disclosure would fall outside of the Department of Labor (DOL)’s safe harbor for electronic disclosure. Does the DOL’s issuance of a proposed rule regarding electronic disclosures change that response in any way?”
Stacey Bradford, Kimberly Boberg, David Levine and David Powell, with Groom Law Group, and Michael A. Webb, vice president, Retirement Plan Services, Cammack Retirement Group, answer:
It is important to remember that the “Default Electronic Disclosure by Employee Pension Benefit Plans under ERISA” rule is still merely a proposal and the contents could change prior to finalization. It would add a safe-harbor at 29 C.F.R. § 2520.104b-31 for disclosure through electronic media.
If finalized in its current form, the rule would still not permit the use of a postcard or letter with a website link as safe-harbor disclosure compliance for an SPD. This is because the safe-harbor requires electronic transmission of the notice. However, a notice to a retirement plan participant could be sent to an electronic address provided to by the participant or assigned by the employer to the employee for such purpose. Additionally, if the participant has opted out of covered documents electronically, the delivery of this notice of internet availability would fall outside of the safe-harbor, as proposed.
Not all documents are covered by the proposal and only disclosures required based upon the passage of time (such as summary annual reports and pension benefit statements) or those triggered by a specific event (such as a summary of material modifications or blackout notice) are covered. Health plan disclosures were not covered at all under the proposal.
The final regulation, once promulgated, should be read carefully to determine whether there are changes that impact the answer given above.
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.
« TRIVIAL PURSUITS: Who Was the First Flight Attendant?