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FAST FACTS: E-Disclosure Rule for ERISA Retirement Plans

by: The Knowledge Group

June 25, 2020

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The U.S. Department of Labor has published its rule for default e-disclosure for pension benefit plan communications.

The former (2002) rule already allowed e-disclosure to employees who have access to a company electronic information system, and to people who otherwise opt in. That still holds; but now, plan administrators may alternatively notify personnel that retirement plan disclosures will come via a webpage, app, or email.

The new E-Disclosure Final Rule, which enables modernized retirement plan disclosures, is effective 27 July 2020 but may be implemented now, in the interest of offering flexibility during the COVID-19 pandemic.

What to Do First

Before your company’s plan administrator shifts to the new default, send out a paper notice explaining that electronic delivery, not postal delivery, will now be used, although recipients may request paper delivery at no extra charge.

The notice must go out to new hires, current employees, and ex-employees. Companies might ask employees who leave their jobs to provide a personal email address or phone number.

How to Send Plan Information Electronically

Information may be sent via email or email attachment, by a mobile app, or on a webpage. The company should insert “Disclosure About Your Retirement Plan” in the subject line.

All notices must be timely, searchable, understandable, and printable. E-delivery can now be the default for any retirement documents distributed under Title I of ERISA, but this currently does not apply to:

  • Documents furnished only on request.
  • IRS documents. (The IRS will issue additional e-delivery guidance at a future date.)
  • COBRA information and notices of adverse benefit determinations.

Plan administrators must provide their phone numbers, take reasonable security steps, and set up system alerts for bounces, so proper follow-up occurs.

How to Create a Notice of Internet Availability (NOIA)

If using a webpage or an app, provide an understandable notice of internet availability.  Prominently include “Disclosure About Your Retirement Plan” and explain: “Important information about your retirement plan is now available. Please review this information.”

Further:

  • Name and briefly describe the document and offer the website URL.
  • Convey the right to request paper documents instead, along with instructions.
  • Advise recipients that documents may be deleted after at least one year, or later, after the publication of updated versions.
  • Include the plan representative’s phone number.

For the finer points, please review the Default Electronic Disclosures by Employee Pension Benefit Plans Under ERISA Final Rule.

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