Bottom Line: The Department of Labor (DOL) has released new guidance for retirement plans to meet their ERISA disclosure obligations:
Retirement plan sponsors and administrators should take the time now to learn about these new disclosure rules and assess current plan disclosure practices and procedures for compliance. Companies should take the “next steps” (described below) and work with their legal advisors and third-party record-keepers to determine if this new electronic disclosure safe harbor is appropriate for their retirement plans.
The DOL recently released a final rule for an additional electronic disclosure safe harbor for retirement plan administrators to meet their ERISA disclosure obligations for plan participants and beneficiaries. This new “notice and access” safe harbor is now available to plan sponsors in addition to the DOL’s other electronic disclosure safe harbors, which were finalized in 2002 (commonly called the “wired at work” and the “affirmative consent” safe harbors). The DOL did make some changes from the proposed rule (published last fall) based on public comments to the proposed rule. But the final rule does not significantly change the fundamentals of the proposed rule (see our earlier article describing the proposed rule in detail).
The key points to know about this new rule to assess whether it may be of interest for your retirement plan:
The DOL did reserve a placeholder for possible future guidance for welfare plans and indicated in the preamble to the final rule that, in response to this new DOL safe harbor, it anticipates future Treasury guidance about electronic disclosure for retirement plans.
As part of EBSA Disaster Relief Notice 2020-01, the DOL announced that retirement plan fiduciaries will not be responsible for a delay in providing an ERISA-required disclosure to plan participants and beneficiaries as long as the plan fiduciary acts in “good faith” and furnishes the required disclosure “as soon as administratively practicable under the circumstances.”
Employees who regularly deal with administration of their company’s ERISA-covered retirement plans should consider the following actions in light of this new DOL guidance: