Labor Department headquarters inWashington. (Photo: Mike Scarcella/ALM)
The Labor Department released Thursday its final rule allowing electronic disclosuresof retirement information online or via email.
|"This commonsense rule reflects today's marketplace whileretaining the ability of participants to choose how they receivetheir retirement information," said Preston Rutledge, the assistantsecretary of labor for the Employee Benefits SecurityAdministration.
|Rutledge added on a call with reporters that allowing electronicdisclosures not only permits the use of modern technology but is"more efficient" during the current COVID-19 crisis.
|Rutledge will leave his post at the end of May.
|The rule, drafted in response to President Donald Trump's2018 executive order "Strengthening Retirement Security inAmerica," allows employers to deliver disclosures to planparticipants primarily electronically, which will reduce printing,mailing and related plan costs by an estimated $3.2 billion overthe next decade, Labor said.
|The rule will make disclosures more readily accessible anduseful for participants, but preserves the rights of those whoprefer paper disclosures.
|"The rule will rely on widely available technology to keepworkers and retirees informed about their plans, while stillpreserving the option to receive retirement information by mail,"added Labor Secretary Eugene Scalia, in a statement. "As we lookahead to reinvigorating the American economy, the Department ofLabor's priorities include eliminating unnecessary burdens foremployers that sponsor retirement plans and on addressing the needsof wage earners, job seekers, and retirees."
|The final rule allows retirement plan administrators to furnishcertain required disclosures using the proposed "notice-and-access"model, Labor said.
|Retirement plan administrators can use email to send disclosuresdirectly to participants. "These administrators must notify planparticipants about the online disclosures, provide information onhow to access the disclosures, and inform participants of theirrights to request paper or opt out completely," Labor said.
|The new rule also includes additional protections for retirementsavers, such as accessibility and readability standards for onlinedisclosures and system checks for invalid electronic addresses.
|Susan Neely, president and CEO of the American Councilof Life Insurers, said that the rule couldn't come at a bettertime. "People are conducting business all the time over theirphones and through other technologies," she said in a statement."Digital capabilities are more important all the time and that'sbeen amplified by COVID-19. It only makes sense for peopleto have access to information about their retirement plans whenthey want it, wherever they are.
|Labor's rule also "does a good job of addressing preferences ofall plan participants by protecting those who prefer traditionalpaper."
|— Related on ThinkAdvisor:
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Melanie Waddell
Melanie is senior editor and Washington bureau chief of ThinkAdvisor. Her ThinkAdvisor coverage zeros in on how politics, policy, legislation and regulations affect the investment advisory space. Melanie’s coverage has been cited in various lawmakers’ reports, letters and bills, and in the Labor Department’s fiduciary rule in 2023. In 2019, Melanie received an Honorable Mention, Range of Work by a Single Author award from @Folio. Melanie joined Investment Advisor magazine as New York bureau chief in 2000. She has been a columnist since 2002. She started her career in Washington in 1994, covering financial issues at American Banker. Since 1997, Melanie has been covering investment-related issues, holding senior editorial positions at American Banker publications in both Washington and New York. Briefly, she was content chief for Internet Capital Group’s EFinancialWorld in New York and wrote freelance articles for Institutional Investor. Melanie holds a bachelor’s degree in English from Towson University. She interned at The Baltimore Sun and its suburban edition.
