Recently, the Department of Labor (“DOL”) released a proposed rule that would enhance the current electronic disclosure rules that have not been updated since 2002. In short, the proposal would allow plan sponsors to distribute disclosures for retirement plans via a website. Although this is a welcome addition, there are several important details to consider.
The proposed rule allows any document that a plan sponsor is required to furnish to participants and beneficiaries to be published to a website. Individuals covered under this electronic disclosure would be plan participants, beneficiaries, and alternate payees who either (1) have provided the employer with an “electronic address” (i.e., an email address or cell phone number), or (2) have been assigned an email address by the employer. In order to meet the DOL safe harbor rules, plan sponsors must distribute a “Notice of Internet Availability” for each required disclosure, or at least annually, if a regular disclosure, to participants and beneficiaries prior to publishing any disclosures and the website must meet certain requirements. Below are the requirements for both the notice and the website.
Content of “Notice of Internet Availability”
- A prominent statement or title that reads “Disclosure About Your Retirement Plan” along with the following statement – “Important information about your retirement plan is available as the website address below. Please review this information.”
- A brief description of the document.
- The website address where the document can be located.
- A statement of the right to request paper copies, free of charge, and how to obtain such copies.
- A statement of the right to opt-out of receiving electronic disclosures, and an explanation of how to opt-out.
- A telephone number to contact the administrator (or designated representative) of the plan.
- Each document is available no later than the date it is required to be furnished,/li>
- Each document remains available until it is superseded by a subsequent version,
- Each document is searchable,
- Each document is maintained in a widely available format that allows the document to be permanently retained (such as in PDF), and
- The website protects confidential information.
Please keep in mind that these proposed rules are not final so they are subject to further changes and cannot be relied upon at this time.
Nyhart will continue to monitor the proposed rules and publish updates when necessary. If you have any questions, please contact your Nyhart consultant for more information.