DOL Finalizes Electronic Notice Safe Harbor

The Department of Labor (DOL) has finally issued final regulations providing a new “notice and access” safe harbor for retirement plans to furnish required disclosures by email or other electronic ways to plan participants and beneficiaries.


Under this process, the plan administrator may send participants and beneficiaries electronic messages notifying them of the availability of documents and required disclosures posted on the plan’s website.


The Safe Harbor will reduce costs for most retirement plans because it expands the availability of electronic disclosures The Safe Harbor only applies to retirement plan disclosures under the DOL’s jurisdiction. This includes summary plan descriptions (SPDs), participant fee disclosures, pension benefit statements, and blackout notices.


The Safe Harbor won’t apply to documents that are within the IRS’s jurisdiction, such as safe harbor notices


The Safe Harbor will apply to any participants or beneficiaries for whom the plan administrator has a valid email address or other internet address. This can include active employees who have been assigned a work email address or who have provided a personal email address. Plan Administrators can rely on the Safe Harbor for spouses and beneficiaries only if they have affirmatively provided an electronic address.


The Safe Harbor becomes effective 60 days after its publication in the Federal Register. The DOL will not take any enforcement action against a plan administrator that relies on the safe harbor sooner.


The system that the plan administrator must be designed to alert them if a message “bounces back” or is otherwise invalid or inoperable. If that happens, the plan administrator can either send a message to a secondary address on file for the participant or beneficiary, obtain a new address or send a paper notice as soon as possible. When a participant terminates employment, the plan administrator must take reasonable steps to verify that the address is still accurate and available or to obtain a new address.


To rely upon the Safe Harbor, the plan administrator must first furnish a paper notice to participants and beneficiaries informing them that documents will be furnished electronically to an electronic address. This notice must also identify the electronic address that will be used and provide instructions on how to access them and of the right to request a paper document free of charge or to opt-out of electronic disclosures. This notice must also inform participants that documents will be maintained on the website for a minimum of one year or until the document is superseded by an updated version of the document.


For each document that is being provided online, the administrator must send a separate, electronic “notice of internet availability” (NOIA). The NOIA generally must be furnished separately, calculated to be understood by the average plan participant, and be sent at the time the document is posted online. It must generally include:


The title: “Disclosure About Your Retirement Plan.”

A statement that: “Important information about your retirement plan is now available. Please review this information.”


Identification, and if identification would not reasonably convey the nature of the covered document, a brief description, of the online document.


The web address (or hyperlink) for the document.

A statement of the right to get a paper version (free of charge) and a statement of the right to opt-out of electronic communications and how to do so.


“A cautionary statement that the covered document is not required to be available on the website for more than one year or, if later after it is superseded by a subsequent version of the covered document.”


The administrator’s or a designated representative’s phone number.


The notice generally may not contain any content other than the items on the above list. It may, however, “contain a statement as to whether action by the covered individual is invited or required in response to the covered document and how to take such action, or that no action is required, provided that such statement is not inaccurate or misleading.”The administrator may send a combined NOIA for a summary plan description; any document or information required to be furnished annually that does not require action by a particular deadline; disclosures authorized for this purpose by the Secretary of Labor or (where disclosure is required by the Internal Revenue Code) the Secretary of the Treasury. A combined notice of internet availability must be provided annually (with a two month “grace period”).


Documents must remain posted on the website for a minimum of one year or until they are superseded by newer versions.


Documents posted on a website must be posted by their legal due dates for being provided to participants. They must be presented in a way that is calculated to be understood by the average participant and posted in a widely available format or form that is suitable for reading online or printing on paper. Further, the documents must be searchable by numbers, letters, or words. The website on which documents are posted must be reasonably designed to ensure the confidentiality of personal information. The final regulations specifically allow for disclosure documents to be attached to an email instead of posted on a website.


The DOL has retained a requirement that participants be able to request a paper copy of notices free of charge or be able to opt-out of electronic disclosures altogether in favor of receiving paper copies.


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