ERIC Supports Electronic Disclosures

The ERISA Industry Committee (ERIC) believes that electronic disclosures will improve efficiencies at every step in a retirement plan, which it explained in a letter to the Department of Labor (DoL).

Responding to the DoL’s request for information, ERIC laid out the following arguments in favor of electronic disclosure in employee benefit plans:

  • Cost-efficiency – Providing communications electronically reduces the cost of preparation and distribution.
  • Time-efficiency – Electronic communications get to recipients faster than paper communications. The time difference ranges from a few days to more than two weeks.
  • Interactive capability – Interactive features make many electronic communications more user-friendly than paper communications. For example, most electronic documents have search features and can include hyperlinks to relevant background information.
  • Privacy – A secure electronic system offers more privacy protection than paper communications. For example, when a document is delivered by mail, there is no way to control who reads it. Usernames and passwords protect against unauthorized access.
  • Keeping track of updates – A well-managed Web site can alleviate the burden of saving paper documents and keeping personal files up to date. A Web site can provide immediate access to relevant documents.
  • Environment – Use of electronic media saves paper.

ERIC added that the existing requirement to obtain affirmative consent unless access to the applicable electronic medium is an “integral part of [the participant’s] duties” is too restrictive.The organization recognizes that not everyone has access to the Internet, but believes the safe harbor can be expanded to provide sufficient protection for individuals who do not wish, or are not able, to receive communications electronically.

The DoL’s request for information was published in the Federal Register on April 7 (see “DoL Seeks Comments on Electronic Disclosure”).Comments are being accepted until June 6.

ERIC’s letter is available here