The Department of Labor (DOL) Disaster Relief Notice 2020-01 (“Notice”) provides relief to health and retirement plans governed by ERISA by extending the deadlines and other relief.
Notices and Disclosures Under Title I of ERISA
Under the Notice, an employee benefit plan will not be in violation of ERISA if it fails to timely furnish a notice, disclosure or document that is required to be furnished during the “outbreak period”. The “outbreak period” is March 1, 2020 through 60 days after the announced end of the National Emergency. In order to qualify for relief, the plan must act in good faith and furnish the notice, disclosure, or document as soon as administratively practicable under the circumstances.
This Notice also provides that a fiduciary is acting in good faith if it distributes the required ERISA notice electronically, provided that they believe that the participant has effective access to an electronic means of communication. This includes email, text messages, and continuous access to websites. This is a temporary departure from requiring participant consent if they don’t consistently have work-related computer access.
The exhaustive list of the affected notices and disclosures under Title I is not listed here, but includes disclosures such as the Summary of Material Modifications (SMM), Summary Plan Descriptions (SPD), Summary of Benefits and Coverage (SBC), claims and appeals related notices, and Section 404(c) disclosures.
Form 5500 Relief
Forms 5500 that would otherwise be due on or after April 1st and before July 15, 2020 are now due July 15, 2020 and does not require filing of an extension. This relief is identical to the relief provided by the IRS. Note that the deadline for calendar year plans remains July 31, 2020.
Participant Loans and Contributions
The DOL will not treat any plan participant as having violated ERISA solely for providing loans, or delaying repayment of loans, in accordance with the provisions of the CARES Act.
Also, under current rules, participant contributions and loan repayments are considered plan assets and must be forwarded to the plan on the earliest date that they can be reasonably separated from general assets, but no later than the 15th business day of the month in which the monies were withheld by the employer.
During the “outbreak period”, the DOL will not take action against a temporary delay in forwarding participant payments or contributions due solely to a failure attributable to COVID-19. Instead, employers are to act reasonably, prudently, and in the interest of employees and forward the amounts as soon as administratively possible.
The Notice states that plan participants may face problems due to the COVID-19 outbreak and that plans must act reasonably, prudently, and in the interest of covered workers and their families who rely on their employee benefits for their physical and economic wellbeing. It instructs plan fiduciaries to make reasonable accommodations to prevent the loss of benefits if a plan participant fails to comply with pre-established timeframes.
We will continue to review this new guidance and provide updates when available. Please contact your Nyhart consultant for more questions in the meantime.