We recently posted an update on the Department of Labor’s (DOL) new safe harbor for electronic plan disclosures. This update provides information on what an employer must do to take advantage of this new safe harbor.
Currently, there is a safe harbor related to e-disclosures that allows employers to deliver electronic retirement plan disclosures to individuals who (1) have access to employer’s e-mail system and (2) opt-in to receive disclosures electronically. This safe harbor option remains in effect. However, the new rule expands this to allow employers, after sending an initial notification, to provide electronic disclosures to everyone who has an email or smart phone contact. It would require the participant to opt-out of receiving electronic disclosures rather than opt-in.
In order to take advantage of this new safe harbor, all employees that will begin receiving electronic disclosures must be sent a paper notification of this change. Employees receiving electronic disclosures under the original safe harbor are also required to be sent the paper copy announcing the change. You can download a sample notification below. It does require the employer to provide information on the process an employee would follow to opt out of e-delivery or to request a paper copy of a specific disclosure.
After this initial notification has been sent, employers can begin sending the electronic disclosures. They may include the documents as attachments or post them to a website. If posted to a website, employers must notify participants that a new document has been posted by sending a Notice of Internet Availability (NOIA). The NOIA must describe or identify the document being posted, include an address or link to the document, and inform the participant of the right to request a paper copy or opt out of e-delivery altogether. The NOIA can be sent annually and cover multiple documents and must be concise and understandable.
Additional details can be found in the DOL’s Fact Sheet on this new safe harbor.