U.S. Department of Labor in Washington, D.C. (Photo: Diego M. Radzinschi/ALM Media
The Department of Labor has now finalized its proposal to create a new "safe harbor" for the electronic distribution of ERISA-required notices and disclosures. The new safe harbor should be welcome news to virtually all employers who sponsor ERISA-covered retirement plans. Not only should the rule facilitate the distribution of important plan-related information, but it should greatly reduce the costs and burdens on plan administrators. It really may be a "win-win" regulation.
Although the final rule is not effective until 60 days after its publication in the Federal Register, the DOL has indicated that it will not take any enforcement action against a plan administrator that relies on the safe harbor before that date.
Therefore, the electronic delivery safe harbor is essentially available immediately. This is good news, particularly given the number of employees who are currently working remotely due to the COVID-19 pandemic.
Document delivery permitted in either of 2 ways
The final regulation establishes a new, voluntary safe harbor for retirement plan administrators who want to use electronic media, as a default, to furnish covered documents to participants and beneficiaries, rather than providing paper documents through mail or hand delivery. The new safe harbor permits electronic delivery by either of two ways:
- Posting covered documents on the plan sponsor's website, if appropriate notification of internet availability is furnished to the participant's electronic address, or;
- Sending the documents directly to the participant's electronic address, with the covered document either in the body of the e-mail or as an attachment.
Before this final rule, in order to provide participants with ERISA-required notices and disclosures by electronic means, plan administrators had to satisfy a complicated regulatory safe-harbor established by the DOL in 2002.
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