The Department Of Labor (DOL) estimates that over the next decade this rule will save approximately $3.2 billion in net costs for retirement plans covered by the Employee Retirement Income Security Act of 1974 (ERISA)-plans that rely on the rule will be able to eliminate significant materials, printing and mailing costs associated with furnishing printed disclosures.
The final Department of Labor e-delivery regulations set aim to make it easier for retirement plan administrators to deliver notices to members and beneficiaries via internet websites, email or mobile apps. These new rules began to take effect on July 27th, 2020, although the DOL confirmed that it will not enforce any action against plan administrators relying on the new rules before that date. These new rules apply only to retirement plans, but the DOL may be addressing E-delivery rules for health and welfare plans in the future.
This final rule allows delivery of documents by email as an alternative method of e-delivery. Administrators can now choose to post documents to their websites or mobile platforms to house notices. These posted notices have to be available for at least a year, even if superseded earlier. Participants are able to opt-out of e-delivery entirely, but this ruling does not allow participants to opt out on a document to document basis, as the previous proposal did.
The new safe harbor applies to beneficiaries, participants and and other individuals entitled to covered documents under ERISA if they provide the employer or plan administrator with an electronic address. This could be an email address or even smartphone number capable of receiving written notices. The safe harbor is intended to encompass future technological advances that are of a similar capacity for the future. However, if an employer uses a phone number, they must confirm that the number can receive written messages. Similarly, spouses or other beneficiaries must provide the employer or administrator with an electronic address. Plan administrators are able to use previously provided emails from their beneficiaries, participants and employers but must comply with all safeguards.
The final ruling does not provide a model NOIA. The commentators who worked on the proposed rule said the safe harbor requirements in place were quite specific, and that the current model best suited the needs of each employer's circumstances.
Plan administators must hae reasonable procedures for beneficiaries and participants to obtain paper copies of overed disclosures to particpants who want to opt-out of the e-delivery options.All administrators are required to provide one paper copy of a disclosure, free of charge unless plan terms or other ERISA rules require otherwise. There is not allowed to be a fee administered to opt out.
There are quite a few requirements for a NOIA to be understandable before it can be sent to the individual's preferred method of e-delivery: