For Individuals,Retirement Savings Plans,For Plan Sponsors,Custom

DOL Releases Proposed Electronic Disclosure Safe Harbor

November 14, 2019

On October 23, 2019, the Department of Labor (DOL) released a proposed rule that would create a new voluntary safe harbor to allow employee pension benefit plans to communicate certain plan-required notices and disclosures electronically. The proposal was developed in response to a 2018 Executive Order directing DOL to review ways to improve effectiveness and reduce costs of required notices and disclosures.

The new safe harbor would apply to any document required by Title I of ERISA with respect to a pension or retirement plan. The proposed safe harbor would not apply to:

  • any document that must be furnished in response to a specific request;
  • notices and disclosures required with respect to health or welfare plans; and
  • documents and disclosures required under the Internal Revenue Code or securities laws.

How may this affect governmental plans?

While governmental pension plans are largely exempt from ERISA notice and disclosure requirements, rules applicable to private sector retirement plans often serve as a “best practice.” In particular, the ability to reduce paper and subsequently plan costs, while improving employee engagement online, through e-delivery has been championed by ICMA-RC for years. The safe harbor would allow for what is sometimes called a “notice and access” disclosure model, under which a covered document is posted online and individuals are provided a notice with a website address where the covered document is available. This notice is referred to in the proposal as the “notice of internet availability” (NOIA).

In addition to the NOIA, the plan administrator would be required to furnish a one-time paper notification that some or all covered documents will now be furnished electronically to an electronic address.

Participant options for paper delivery

Participants must be informed of their right to request paper copies of individual documents or to opt out prospectively from electronic delivery for covered documents and given an explanation of how to exercise these rights.

What is next with the DOL and when could this be effective?

ICMA-RC has participated in discussions around the proposed regulation and the operational impacts that must be considered. The DOL has asked for comments on the proposed regulation by November 22, 2019.

The final regulation would be effective 60 days after publication, however, it would be applicable to plans who decide to the electronic delivery safe harbor on the first day of the first calendar year following the publication of the final rule. Therefore, the earliest effective date would be January 1, 2021. Under the proposal, adoption of the new safe harbor by a plan is voluntary.

The proposed regulation is available at:

ICMA-RC will continue to closely monitor this situation and update you as developments occur.

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