The Department of Labor (DOL) has proposed a new electronic document disclosure rule that would permit retirement plan sponsors to make plan disclosures available online in order to reduce printing and mailing expenses.
The proposal would offer a safe harbor for those sponsors that want to make electronic retirement plan disclosures the default. Participants would be notified that information is available online, including instructions for how to access the disclosures and their right to receive paper copies of disclosures.
The proposal also includes additional protections for participants, such as standards for the websites where disclosures will be posted and system checks for invalid electronic addresses.
“This proposal offers Americans choice in how they receive important retirement information,” says U.S. Secretary of Labor Eugene Scalia. “By adjusting for modern technology, the Department can help save billions of dollars in costs for the U.S. economy. The U.S. Department of Labor is focusing on rulemaking that eliminates unnecessary burdens while furthering the needs of the wage earners, job seekers and retirees of the United States.”
DOL projects that the proposal could save $2.4 billion over the next 10 years. It is seeking input on the scope, content, design and delivery of the disclosure information. It notes that the proposal is in line with President Trump’s Executive Order 3487.
Chris Spence, senior director, government relations and public policy at TIAA, says his firm will issue a formal opinion on the proposal once it has been able to thoroughly examine it. “That said,” Spence adds, “we have been very supportive of enhancing electronic default delivery for a number of years and have been working closely with the SPARK Institute to advocate for improving electronic delivery, either through legislation or regulation.”
Edward Gottfried, group product manager at Betterment for Business, adds, “The DOL’s new electronic disclosure rule will not only reduce paper usage and cut significant costs across the industry, but will also be beneficial in making sure plan participants are updated on disclosures in a modern and timely fashion. This is an important step in modernizing the industry overall and giving participants more choices for how they access information. We’ve seen strong inclination from plan sponsors and their employees to provide as much documentation digitally as possible, and we’re glad that policy now reflects that opinion.”