The Trump-era Department of Labor's electronic delivery rule has sufficient safeguards in place to not disenfranchise segments of the population in rural areas or those without internet access, according to a report from the Labor Department's Employee Benefits Security Administration.
In May 2020, the Labor Department finalized a rule that permitted default electronic delivery of retirement plan disclosures. The rule provides a safe harbor for employers that want to make retirement plan disclosures accessible on a website, rather than sending volumes of paper documents through the mail.
"Our preliminary assessment is that the subject regulation is unlikely to have any negative impact on the populations identified in the explanatory statement because of the regulation's specific safeguards against such impacts," said the report, which was published Jan. 26.
The report is in response to the Consolidated Appropriations Act of 2021, which included language, referred to as an explanatory statement, that requested a report assessing the rule's impact on "individuals residing in rural and remote areas, seniors, and other populations that either lack access to web-based communications or who may only have access through public means."
The rule's safeguards include an opt out option for participants who prefer printed disclosures. Also, a plan administrator may not default a participant into electronic delivery unless the participant has an email address and notifies the participant by paper that retirement documents will be furnished electronically.
"The department designed these fundamental conditions of the safe harbor specifically to protect the populations identified in the explanatory statement," the report said.
Also, "it would be premature and uninformative to attempt to conduct an assessment of the impact of the subject safe harbor regulation at the present time, because any impact cannot be isolated from other temporary sub-regulatory guidance that separately allows plan administrators to use different electronic methodologies to furnish required ERISA disclosures," the department said in its report.
