Retirement Plans’ Communication Dilemma: Mail, Email or Both?

Retirement plan communication once featured—like most messaging—reams of paper. The digital age, naturally, has featured electronic deliveries.

But recent SECURE 2.0 Act of 2022 guidance that would require at least a single paper statement per year, albeit delayed, and the U.S. Postal Service’s financial troubles have complicated how plan sponsors communicate with plan participants.

Rising postage costs, delivery slowdowns at the postal service and an increasingly digital workforce have accelerated the use of electronic communications. But even as email, mobile apps and text alerts become the industry norm, employers and regulators are grappling with a difficult balancing act: how to modernize disclosures without increasing cybersecurity risks, excluding participants who still rely on paper, or running afoul of SECURE 2.0’s requirements. The Setting Every Community Up for Retirement Enhancement Act of 2019 expanded retirement savings, and the 2022 update required plan sponsors to provide plan participants with at least one annual paper statement unless the participant opts out.

‘One Step Forward, Two Steps Back’

Pressure on communication intensified after the USPS changed its postmark rules late last year, shifting official mailing dates from when mail is dropped off to when it is processed, a change that can delay compliance filings by a day or more.

At the same time, SECURE 2.0’s requirement for one paper statement per year moves in the opposite direction, although the IRS has given plan sponsors time to adjust to that regulation. The result is communications strategies that many plan sponsors describe as increasingly fragmented.

“It feels like two steps forward, one step back,” says David Levine, a partner in Groom Law Group, referring to years of momentum toward electronic delivery, followed by renewed paper disclosure requirements.

Levine says many sponsors remain committed to digital communication because mailing costs have become “a material cost” for plans.

“You bring on someone new into a plan, you have to mail onboarding materials,” he says. “That’s not just cents anymore. It can be a couple of dollars per participant, and if you have a lot of hiring, that adds up very quickly.”

Large plans were already trending toward favoring email and mobile delivery, not because they are cheaper, but because they are measurable and interactive. Unlike paper notices, electronic communications allow providers to track whether a participant opened a message, clicked a link, or completed an enrollment action.

“We’re now at a point that e-delivery is much more common in people’s lives than when, years ago, this first came up on retirement plans,” says Kevin Crain, executive director of the Institutional Retirement Income Council. Crain noted, however, that AARP and other entities have “rightfully” defended participant access to paper communications.

Need for Balance

David John, a senior strategic policy adviser at the AARP Public Policy Institute, for example, says some workers, including older workers near or in retirement, often prefer physical mail to the electronic kind, to which some people lack access. But migration away from paper has exposed a new set of operational and fiduciary concerns.

Levine says plan sponsors increasingly worry about what happens when communications for their plans become heavily dependent on recordkeepers, third-party administrators and digital vendors. While many providers now offer fraud-prevention guarantees and sophisticated cybersecurity systems, sponsors still retain fiduciary responsibility for participant communications under ERISA.

“A lot of this is about contracting and understanding who has what responsibilities,” Levine says. “Who’s on the hook if something goes wrong? Are there guarantees? Are there limitations on liability?”

Experts say plan sponsors can no longer treat communications as simply a printing-and-mailing exercise. Increasingly, communications strategy requires cybersecurity reviews, vendor audits and careful monitoring of delivery failures and opt-outs.

Crain says sponsors should not assume regulators will indefinitely excuse missed deadlines caused by postal disruptions. Instead, he argues that the industry should proactively seek clearer guidance from regulators on how to handle failed deliveries and USPS-related delays.

“I would go proactively to the government and say, ‘Look, this is becoming an issue,’” Crain says, suggesting that industry groups work collectively with regulators, rather than waiting for enforcement actions or litigation.

Many plan sponsors have been shifting communications online while preserving paper delivery for legally required notices and participants who request them.

Knowing the Personnel

But when it comes to effective communications strategy, Levine says solutions depend heavily on workforce demographics and corporate culture. A retail employer with high employee turnover, for example, may need short, action-oriented messages focused on enrollment and portability. An older workforce with large account balances may require more education on decumulation, retirement income and long-term planning.

“There’s no one-size-fits-all strategy,” Levine says. “You always start with understanding your workforce.”

Communications specialists increasingly recommend separating educational content from action-oriented notices, rather than overwhelming participants with lengthy disclosures covering multiple topics at once. Digital tools allow plans to send smaller, more targeted messages, while paper statements increasingly function as annual anchor documents.

Still, regulators and advocates warn against assuming all participants are equally comfortable online. AARP research shows some retirees and older workers still retain information better when they get it from printed materials, and some struggle to maintain updated personal email addresses after leaving employers. That concern partly explains why SECURE 2.0 preserved paper statements despite the broader shift toward electronic delivery.

“The annual paper statement doesn’t stop modernization,” Crain says. “It just ensures no one is left behind.”

More on this topic:

	Communication Liability Falls to the Plan Sponsor
	Education vs. Advice: The Difference Matters
	How to Avoid Misunderstanding and Misinformation