On May 21, 2020, the Department of Labor (the “DOL”) announced a final rule establishing a new electronic disclosure safe harbor. The new safe harbor permits retirement plan administrators to deliver certain plan documents by one of two methods: (1) a “Notice and Access” method; or (2) a direct email method. The new safe harbor is unavailable to health and welfare plans. The regulatory electronic delivery safe harbor established by the DOL in 2002 is not superseded by the new safe harbor and is still available as an option for plan sponsors. A brief summary of the new safe harbor follows.
Safe Harbor Recipients
The new safe harbor is available for individuals who provide an electronic address at which such individuals can receive written notices of internet availability (“NOIAs”) or required plan documents. Plan administrators can obtain electronic addresses using a number of methods, such as requiring job applicants and plan enrollees to provide an email address or requiring electronic addresses as part of establishing online access to plan documents and account information.
Plan administrators can use employer-provided email addresses as long as they are provided for some employment-related purpose other than the delivery of plan documents. Employers cannot assign emails to non-employee spouses or other beneficiaries.
Initial Paper Notice Requirement
Before a plan administrator can take advantage of this new safe harbor, each individual must receive a paper notice. The new safe harbor sets out specific content requirements for this notice.
The Notice and Access method permits plan administrators to provide an NOIA to individuals to notify them that a plan document is available on a website or electronic application. The new safe harbor sets out specific content requirements for NOIAs. The system of NOIA delivery must be designed to alert the plan administrator of invalid or inoperable electronic addresses. The new safe harbor also sets out specific requirements for the website where plan documents are posted.
Plan administrators can alternatively provide plan documents directly by email, provided that specific form and content requirements, as described by the new safe harbor, are followed.
The new safe harbor requirements are complex and plan administrators seeking to take advantage of electronic delivery under the new safe harbor should review the final rule closely.