To Email or Not to Email: Sending ERISA Disclosures Electronically

The ERISA requirements for delivering retirement plan information to participants are extensive — and potentially expensive. As a plan sponsor, you must deliver multiple disclosures to participants on a regular basis, ranging from plan notices to quarterly benefit statements.

But there’s some good news when it comes to delivering retirement plan disclosures: You can send most disclosures electronically. Doing so can save money as well as increase delivery reliability and simplify the entire disclosure process.

Safe Harbor Requirements

Per the DOL’s Electronic Disclosure Safe Harbor, any notice or other disclosure document sent by electronic means will be considered to have been delivered as long as the requirements of the safe harbor are met. These include the following:

  • The electronic delivery system used is designed to reasonably assure receipt of the information.
  • The system is designed to protect the confidentiality of participants’ personal information.
  • Participants must receive a notice explaining the importance of the document at the time the document is delivered, as well as their right to receive the document via paper if they prefer.
  • Documents delivered electronically must be prepared in the same style and format of the particular disclosure, as well as contain all the information included in the disclosure.
  • Participants must be provided with a paper version of the document if they request one.

The safe harbor gives plan sponsors a lot of flexibility when it comes to different electronic delivery methods. For example, you can send documents to participants as email attachments or within the text of an email, or you can send a link to where the documents reside online if you prefer.

You can also post documents on your company’s website or Intranet and provide them via removable electronic media, like a flash drive, CD-ROM or DVD.

Are Participants “Wired at Work”?

Plan participants who are current employees with work-related computer access to your electronic information system are considered to be “wired at work.” You do not have to obtain these participants’ permission to deliver disclosure documents to them electronically. However, you do have to obtain consent from non-employee participants and participants who do not have work-related computer access to your electronic information system.

The safe harbor applies to all types of ERISA-required participant communications, including but not limited to the following:

  • Open enrollment materials
  • Summary Plan Descriptions (SPDs)
  • Summaries of Material Modifications (SMMs)
  • Summary Annual Reports (SARs)
  • Summary of Benefits and Coverage (SBCs)
  • QMCSO and COBRA notices
  • HIPAA certificates of creditable coverage

In addition, 401(k) plan notices (like blackout period notices, 404(c) notices and participant loan information) can also be delivered to participants electronically.

Is It Feasible for You?

If you are still delivering retirement plan information to participants via paper, you should consider the feasibility of switching to electronic delivery. This could save both your company and your participants valuable time and money.

P.S. Earlier this year, the ASB issued an exposure draft to the auditing standard which could potentially, if adopted, make radical changes in audit reports for employee benefit plans. Read BMF’s comment letter to the ASB recommending changes and identifying deficiencies.

About the Authors

Cindy H. Mitchell
Cindy H. Mitchell


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