Defined contribution plan sponsors and service providers could get some relief from the Department of Labor on the cost of sending notifications to plan participants, through a possible change in electronic delivery regulations.
A request for information on electronic delivery is being reviewed by the Office of Management and Budget and is expected to be completed and published in the Federal Register “in the very near future,” according to DOL spokesman Jason Surbey.
“I think it makes sense for the department to get information about the latest technology and forms of delivery,” Michael Curto, head of the ERISA and employee benefits practice group at Washington law firm Patton Boggs LLP, said in a telephone interview.
The RFI was first mentioned in a DOL final rule last October concerning disclosure of fees charged to DC plan sponsors.
In 2002, the DOL issued regulations providing two forms of safe harbor to plan sponsors and service providers for delivery of notifications to plan participants. They allow plan sponsors and service providers to send the notifications electronically to employees who use a computer “as an integral part of their duties” or to employees who sign an “affirmative consent” form, allowing plan sponsors to cut off paper delivery of notices.
Failure to get consent does not preclude companies from sending notifications electronically, though they must continue mailing the paper notifications.
The regulation was expanded in the 2006 Pension Protection Act, allowing plan sponsors and service providers to post information on a secure, password-protected website for employees to access. Plan sponsors, however, are still required to send paper notifications to employees who have not given consent to cut them off.