SPARK Urges Widespread Use of Electronic Disclosure

June 1, 2011 ( - The SPARK Institute urged the Department of Labor (DoL) to issue new rules that permit widespread use of electronic media for required disclosures to retirement plan sponsors and participants.

In its response to a Request for Information (RFI) on Electronic Disclosure from the DoL (see DoL Seeks Comments on Electronic Disclosure), the Institute urged the Department to act quickly to issue new rules based on a flexible, principles based framework for disclosure that recognizes electronic communications as a standard means of communicating with participants and permits electronic disclosure of required materials, is not technology or hardware dependent, and is the same for all defined contribution plans, all materials and all recipients.   

Based on the forgoing principles, SPARK recommended a “notice/access/opt out” framework that would permit all currently required disclosures, information and notices to be maintained and kept available on a continuous basis on a secure Web site.  According to Larry Goldbrum, General Counsel, the method currently preferred for providing materials electronically is to send an email notice to participants that information and disclosures are available and include a link to a secure Web site or provide directions for online access to where the information is maintained.  

In its response, The SPARK Institute also recommended several changes to the current DOL safe harbor for electronic disclosure: 

  • Replace the affirmative consent to use of electronic delivery requirement, i.e., the opt in requirement, with an opt out approach.  
  • Eliminate the requirement that participants must be able to access documents over the employer’s electronic system as an integral part of their duties. 
  • Allow plans to elect to use electronic communications as the default method of providing required plan materials to all employees, participants and beneficiaries, provided that certain conditions are met. 
  • Permit plans to provide the initial and annual notices through any combination of electronic and paper communications that are reasonably designed by the plan sponsor to ensure receipt by the intended recipient.  Additionally, the plan sponsor should be permitted to rely on any electronic contact information provided by the employee or participant, and send notices through any electronic channel using the contact information provided by the intended recipient.    
  • Do not require plans to provide the annual “reminder” notice to anyone who affirmatively consents or elects to receive electronic communications.     


Goldbrum said that the increased ability to use electronic communications and media to comply with the new participant disclosure rules would aid in ensuring compliance with the rules.    

The SPARK Institute response is posted at