When the Department of Labor finalized a rule in May that permitted default electronic delivery of retirement plan disclosures, record keepers and plan sponsors welcomed the move by saying it will increase participant engagement and cut mailing costs.
And while those points still hold, since the rule went into effect July 27 there hasn't been much movement to implement default electronic disclosure programs. Both plan sponsors, which need to OK the electronic shift, and record keepers, which need to figure out the logistics, have been busy lately.
"Most members are just starting to spec out the program," said Tim Rouse, executive director at the Simsbury, Conn.-based SPARK Institute, which represents retirement industry players such as record keepers, investment advisers, mutual fund companies and benefit consultants. "So much has been happening with regard to the SECURE Act and CARES Act and executive orders. This has been something that our members have been wanting for a long time but there's so much other activity going on that we're all just starting to implement the new rule now."
Will Hansen, executive director of the Arlington, Va.-based Plan Sponsor Council of America and chief government affairs officer at the American Retirement Association, has noticed something similar from plan sponsors. It's "not a negative toward the rule, it's just priorities," he said. "Right now from an HR perspective, priorities are still focused on the pandemic and the general end-of-year employee benefit activities, and once that goes away I think there can be a renewed focus to best implement the electronic disclosure rule."
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.