Plan Sponsors have a reason to be excited today because the government just made administering a retirement plan a little bit easier for once. This morning the Department of Labor unveiled the final regulations allowing for E-Delivery of all required plan notices. This rule represents a sizeable shift in policy and signals that the Department of Labor is ready to embrace the efficiencies provided by the internet and mobile devices.
Initially released as a proposed rule last October, the final rule was no doubt hurried to completion as a result of the COVID-19 outbreak, which has demonstrated to everyone that the internet will be a large part of how we communicate with employees going forward. Estimated to save plan sponsors (and employees) $3.2 billion over the next 10 years, the final rule is very close to the proposed rule and provides for significantly easier distribution of plan notices.
The lawyers and recordkeeping platforms are currently pouring through the details of the final rule, but the highlights are below:
- Effective Date: 60 days after publication (So we believe roughly at the end of July)
- The rule covers all notices and required documents related to plans (SPD, SAR, Safe Harbor, Fee Disclosures, Blackouts, Fund Changes, etc.).
- In order to qualify for the safe harbor provided by this regulation, employers will be required to have an active, valid email address on file. The email address can be one issued by the employer for work purposes (cannot be just for the purpose of e-delivery) or a personal email address. Sponsors will need to adopt processes to ensure these emails are kept up to date.
- A Notice of Internet Availability (“NOIA” – our new favorite acronym) will need to be provided ON PAPER for documents posted online; however, sponsors can (and will) provide a combined NOIA once per year listing all documents available online.
- Documents can be posted on a website OR emailed directly by the sponsor to the employee.
- Employees will not need to opt IN to e-delivery. Employers will be able to set e-delivery as the default method for delivery.
- Employees can globally opt OUT of e-delivery and request mailed copies. Employees can also request one-time paper copies of specific documents.
More specifics about this rule and how it will be implemented at each provider will be forth coming in the next few months. For now, however, one thing is clear – if you are not currently tracking email addresses (work and personal) for your employees, now is a great time to start!
We will keep you updated as we learn more.
The final rule is available here.Download PDF