The Department of Labor has released new guidance and relief for employee benefit plans in the wake of the COVID-19 outbreak. Unless otherwise noted, the following guidance is applicable from March 1, 2020 until 60 days following the announcement of the end of the COVID-19 Emergency.
Clarification of 5500 Deadline – The new guidance confirms the extended 5500 deadline based on previously issued IRS guidance stating that Form 5500 filings that have an original due date (or extended due date for previously filed extensions) that fell between April 1 and July 14, 2020 are extended until July 15, 2020.
Participant Notice & Disclosures – An employee benefit plan and plan fiduciaries will not be in violation of ERISA for a failure to timely furnish a notice, disclosure, or document that must be provided between March 1, 2020 and 60 days after an announced end of the emergency so long as the plan fiduciary acts in good faith to provide the notices and disclosures as soon as administratively practicable.
Electronic Delivery of Notices & Disclosures – The above good faith acts include the use of electronic alternative means of communication such as email, text messages and website access as long as the fiduciary reasonably believes the participant(s) has effective access to these methods.
Submission of Employee Deferrals & Loan Payments – The DOL will not take enforcement action with respect to a temporary delay in submitting employee deferrals and loan payments to the plan if it is solely on the basis of a failure due to COVID-19. Employers still must act reasonably and in the interest of employees to comply as soon as practicable.
Participant Loan Provisions from CARES Act – The DOL has advised the Treasury Department that they will not consider the COVID-19 loans provisions contained in the CARES Act as a violation of ERISA provisions pertaining to the adequate security of loans and the delay of loan repayments.
Plan Loans & Distributions – If a plan fails to follow the procedural requirements set forth by the plan document, the DOL will not consider it a failure if: 1) the failure is solely attributable to the COVID-19 outbreak 2) the plan administrator makes a good-faith effort to comply with the plan procedures 3) the plan administrator makes a reasonable attempt to correct any procedural deficiencies as soon as administratively feasible. This relief doesn’t apply to rules outside of the DOL’s jurisdiction, such as spousal consent rules.