The Department of Labor has released final regulations updating the requirements for delivering plan disclosures to participants electronically. These regulations can be relied upon immediately.
The regulations allow retirement plan administrators to make certain disclosures available either on a website or to furnish the disclosures directly to a participant’s email address. In order to deliver the disclosures electronically, retirement plan administrators must supply an initial notice on paper alerting employees that some or all of the plan disclosures will be delivered electronically. This initial paper notice must describe the employees right to receive paper copies of the disclosures free of charge and their ability to opt-out out of electronic delivery.
The regulations allow retirement plan administrators to use electronic delivery for any disclosure required under Title I of ERISA. This includes but is not limited to the following disclosures: 1) Summary Plan Descriptions (SPD), 2) Summary of Material Modifications (SMM), 3) Summary Annual Reports (SAR), 4) Black-Out Notices, and 5) Qualified Default Investment Alternatives Notice (QDIA).
Is this update a good thing?
This is a much needed update to the old regulations which most retirement administrators found difficult to use. This update can save employers a large amount of time by sending out a simple email instead of ensuring they send a physical copy of each disclosure to each participant. It can also drastically reduce the amount of paper used, especially for large employers.
If you have any questions on the new electronic delivery options and/or on what the requirements are to take advantage of them, please reach out to Nicole Brown, CPA CEBS or Cole Hegstad in SDK’s Employee Benefits Department and we would be happy to help!