Experts at the American Society of Pension Professionals & Actuaries say electronic delivery for legally required defined contribution plan disclosures is more user-friendly and will help plan participants more easily understand and respond to the information provided.

ASPPA is urging the Department of Labor to make electronic delivery the default mechanism for conveying disclosure notices and information to plan participants.

“The arc of change is overwhelmingly in the direction of electronic rather than paper delivery,” said Peter P. Swire, an expert on cyberspace and laws governing the Internet, who was commissioned by ICI and ASPPA to undertake the study. “With Internet access so widespread today, electronic disclosure is actually better in major respects than traditional paper delivery. There is a compelling case for the next DOL regulation to permit plans to choose a default rule of electronic delivery.”

Findings of the study are detailed in new white paper, "Delivering ERISA Disclosure for Defined Contribution Plans: Why the Time Has Come to Prefer Electronic Delivery."

ASPPA reports that greater use of electronic delivery for legally required plan disclosures also will provide "cost savings for plans, reduce environmental impacts, and meet statutory requirements and the goals of President Obama’s executive order on government regulation."

E-Delivery Can Improve Disclosure for Investors; Provide Better Access The white paper explains that e-delivery can provide better notice than paper delivery, in large part because disclosure can be “layered,” with a short and simple notice on top that provides click-through access to more detailed disclosures for participants seeking more information. In addition, electronic notice can provide “just-in-time” information to help participants at the point of making decisions about their plans. Even if electronic delivery became the default method, individuals would retain the right to opt for paper notices instead.

Electronic delivery, contend Swire and Ahmad, also allows participants to have access to information about their plans anytime, anywhere. In addition, they say, it gives participants better information storage or filing options, and it provides alternatives for persons with disabilities, such as those who are visually impaired.

“In a world in which the IRS now no longer mails annual tax forms, but instead makes them available online, we think plans should be able to make electronic delivery the default option for required information for DC plans,” said ASPPA Executive Director and CEO Brian H. Graff. “Widespread and growing Internet access has and will continue to make electronic delivery the modern day option for providing important disclosures to participants, while preserving the ability of plan participants to receive paper notices if they want them.”

E-Delivery Also Can Reduce Costs and Environmental Impact

A shift to e-delivery would mean reduced printing and mailing costs for plans and thus potential savings for participants, according to the white paper.

For example, the authors contend that e-delivery of a single new four-page notice could eliminate $36.7 million to $60.5 million per year in printing and mailing costs. Switching to e-delivery for several common annual disclosures to participants would also reduce the environmental impact and could save as many as 11,600 trees or 39 acres of forest annually.

“The DOL’s examination of the rules governing electronic delivery is consistent with the Obama Administration’s push towards promoting innovation and technology, and we applaud them for considering this important issue that could bring real benefits to participants in retirement plans” said ICI Senior Counsel for Pensions Mary Podesta. “We hope this study will help educate regulators and the public about the current state of play of Internet access and the benefits of providing information to individuals electronically.”

Technological and Investor Considerations Support Shift Toward E-Delivery

The Swire-Ahmad paper makes clear that the advance of technological changes and widespread Internet access make the time right for DOL to make e-delivery more readily available to participants. It pulls together research that demonstrates that working American families are almost as likely to have Internet access as they are to own a telephone.

Working households with DC accounts are even more likely to have Internet access compared with other working households in similar age or income groups. Mobile devices reduce the digital divide and are speeding the convergence of Internet access by different demographic groups, the study notes. In addition, e-delivery offers important cyber security advantages, such as providing more sophisticated account user authentication.

The authors are submitting their white paper to the DOL as part of the public comment file on its request for information about how to change 2002 regulations governing the choice between paper and electronic delivery for ERISA notices and information. On June 6, ICI and ASPPA submitted separate comment letters to DOL in response to the RFI.

Instant Insights /

ASPPA: DOL should make e-delivery of plan disclosures standard

More From HR Executive

Related Stories

Recommended For You