The Department of Labor has issued interim rules for the electronic distribution of the information required to be disclosed under the fee transparency rules. (Please see our companion article, “A New Era of Fee and Expense Transparency Approaches.”)
Employees with Regular Access to Company’s Email or Intranet: For employees who have access to an email or website and access the system as an integral part of their regular work duties, the required plan and investment information may be distributed via that system, provided the delivery informs the employees of the significance of the information and results in actual receipt.
All Others: Electronic distribution to all other individuals will require some level of consent, although consent may be implied in certain circumstances. With respect to the required plan-related information which overlaps with the information that is required to be distributed in the quarterly Pension Benefit Statement (“PBS”) (e.g., total account balance, list of investment options and restrictions on investment direction), that information may be disclosed with the PBS, in accordance with the electronic delivery rules for the PBS. With respect to all other information required to be disclosed under the fee transparency rules, including the investment-related information and comparative chart, it may be provided electronically if:
- The individual has given affirmative consent to receive these plan disclosures electronically; OR
- The individual voluntarily provides an email address for purposes of these disclosures AND receives an initial notice and annual notice meeting certain requirements. An email assigned to the participant as a condition of employment or participation in the plan is not considered to have been voluntarily provided by the individual. But if the individual is required to provide an email to get access to a secure continuous website, the email will be considered to have been provided voluntarily. The initial notice generally needs to be provided within 30 – 90 days before the disclosure deadline (i.e., for calendar year plans, between March 1 and May 1, 2012). Under a special transition rule – if at the time the plan is to give the initial notice, the plan has an email address on file for an individual (including one assigned by the employer), and there is evidence that the individual interacted electronically with the plan from such address (e.g., by updating, resubmitting or confirming an email address; sending an electronic message to the plan from such email address; logging on to a secure continuous access website of plan information using such email address as the user name; or receiving and opening an electronic message sent by the plan to such email address) during the 12 months prior to issuing the initial notice, then the plan can deliver the initial notice electronically to such email address.
Electronic disclosures must always inform participants and beneficiaries that paper copies are available at no cost.