The U.S. Department of Labor announced a proposed rule to allow online retirement plan disclosures to reduce printing and mail expenses for job creators and make disclosures more readily accessible and useful for America's workers.
Reflecting modern internet technology, the proposal offers a safe harbor for employers who want to make retirement plan disclosures accessible on a website, rather than sending volumes of paper documents through the mail.
Plan 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 includes additional protections for retirement savers, such as standards for the website where disclosures will be posted and system checks for invalid electronic addresses.
"This proposal offers Americans choice in how they receive important retirement information," said 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."
The Department expects the proposal to expand use of internet technology to furnish covered disclosures to workers and to result in approximately $2.4 billion net cost savings over the next 10 years for ERISA-covered retirement plans by eliminating materials, printing and mailing costs associated with furnishing printed disclosures.
In addition to the benefits to workers and job creators contemplated by the proposed rule, the Department wishes to request views from all parties on whether other, additional steps could be taken to further improve workers' retirement plan disclosure experience. To that end, the proposal also includes a separate request for information that contains detailed questions covering a broad range of disclosure-related topics, including scope, content, design and delivery. Responses to these questions will enhance the Department's record and inform whether additional changes should be made in response to that feedback in the future.
In August 2018, the White House issued Executive Order 13847, which called for the Secretary of Labor to review actions that could be taken to make retirement plan disclosures more understandable and useful for workers, while also reducing the costs and burdens the disclosures impose on employers and plan administrators. The order explicitly directed the Department to explore the potential for broader use of electronic delivery as a way to improve disclosures' effectiveness. The Department used its delegated authority under the Employee Retirement Income Security Act of 1974 in developing the rule.
The proposed rule was developed by the Department's Employee Benefits Security Administration (EBSA). EBSA's mission is to assure the security of the retirement, health and other workplace related benefits of America's workers and their families.
The Department's mission is to foster, promote, and develop the welfare of the wage earners, job seekers, and retirees of the U.S.; improve working conditions; advance opportunities for profitable employment; and assure work-related benefits and rights.