Bipartisan legislation has been introduced in the U.S. House of Representatives that would allow employers to modernize how they communicate retirement benefits information to employees.
The Receiving Electronic Statements to Improve Retiree Earnings Act would permit sponsors to send plan documents and disclosures to employees via email.
Reps. Phil Roe, R-Tennessee, Mike Kelly, R-Pennsylvania, Jared Polis, D-Colorado, and Ron Kind, D-Wisconsin introduced the legislation, which was referred to the Committee on Education and Workforce.
“Employers who voluntarily offer 401(k) plans and others are currently hampered by arcane and costly administrative rules for disseminating this information,” said Rep. Kelly in a statement. Kelly is co-chair of the recently formed House Retirement Security Caucus.
Kelly said the bill would reduce costs for both sponsors and providers of plans. Martha King, managing director of Vanguard Institutional Investor Group commended the bill for addressing cost-efficiencies.
"Electronic delivery will enable us to better educate participants through linking to online tools and customized content that we believe will lead to better investing results," she said.
The bill, which would amend existing language in ERISA, is one page long. Participants would have the option of receiving plan documents in paper form. If enacted, the amendment would affect plans beginning December 31, 2015.
The lawmakers sited evidence suggesting sponsors spend up to $60 million annually for one four-page notice.
The Spark Institute is releasing a study that estimates the bill will create $200 million to $500 million in aggregate annual savings for retirement plans.
“This means, quite simply, more resources for Americans in retirement,” said Joseph Ready, president of the Spark Institute, in a letter to the lawmakers.
“It’s time to bring our retirement information delivery capabilities into the 21st century,” said Rep. Polis.
“Our bill meets the needs of most Americans who prefer their inbox to their mailbox, while protecting those that continue to want paper documents. It saves money, protects the environment, and gives everyone greater access to the information they need to make decisions about retirement and savings," he added.