New proposed regulations from the Department of Labor (DOL) will give employers additional flexibility to deliver required retirement plan disclosure documents electronically. Released in October 2019, these rules would allow plan administrators to satisfy notice delivery requirements by posting notices to a website, so long as they meet certain conditions. This helps both businesses and individuals cut down on paper and makes it easier to retroactively search and identify documents.
- Notifying Covered Individuals: A covered individual is any plan participant, beneficiary, or other individual who is required to receive notices. If that individual has provided an email address or smartphone number, including an employer-assigned email address, then they can be notified electronically. There is no requirement to verify email addresses or phone numbers and no requirement to provide computer and Internet access to the employee.
- Notice of Availability: In order to provide electronic notice, the plan administrator must provide covered individuals, via their email or smartphone number, a Notice of Internet Availability. It should come out each time something new is posted to the website, or a combined notice can be provided annually. This Notice must include a brief description of the notices posted on the website, an Internet address for each notice, and a statement that the individual has the right to receive a paper copy of any notice or to opt out of electronic disclosure. This notice can also be combined with other required notices such as the summary plan description.
- Advantages of Annual Notice: If notice is provided approximately annually (at least once every 14 months), the plan administrator is not required to notify individuals each time a new notice is posted to the website. There is some debate on this practice, and the final version of the regulations may provide that certain types of notices can be included in an umbrella annual notice while others require a separate notice specifically when they are posted.
- Notice Website: There are certain requirements for the website where the notices are posted, mainly focused on the security of the website and the accessibility of information. The website can be maintained by a third-party provider.
- Paper Notice: While electronic notices are nice, initial notice must be given to a new covered individual in paper. This notice must include language about the electronic delivery of future notices. Further, it must give the individual the right to opt out of electronic delivery and continue to receive paper notices.
These are only proposed, not final regulations, but they give businesses something to start planning towards. It is important to note that at this time, these regulations will only apply to retirement plan notices, not notices for other types of benefit plans (i.e., health and welfare benefit plans).
The attorneys at Hall Benefits Law pay attention to a wide variety of benefits-related sources and use this information to anticipate what changes are coming and help clients take advantage of the law to set up benefits structures and plans that best fit their needs. To learn more, reach out today by calling 678-439-6236, or visit the Hall Benefits Law website.
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