In an announcement issued in the April 7, 2001, Federal Register, the DOL issued a request for information in connection with its review of the use of electronic media to provide employee plan participants with required notices and other disclosures. The announcement includes a useful summary of current rules issued by the DOL, IRS, and SEC under various disclosure rules. The DOL review follows a January 2011 Executive Order that has a goal of meeting regulatory requirements through the most innovative and least burdensome tools available.
Current rules on using e-mail and other Internet-based systems to provide required plan communications include a 2002 DOL safe-harbor rule for electronic delivery of summary plan descriptions and other plan disclosure requirements, a 2000 IRS regulation regarding delivery of notices and consents in connection with retirement plan distributions, 2003 rules applicable to notices on plan amendments that reduce future accruals, and SEC rules issued in 2007 and 2009 regarding the delivery of proxy materials and mutual fund prospectus delivery.
The 2002 DOL rule allows for electronic delivery of plan disclosures if the plan administrator takes appropriate measures calculated to ensure actual receipt of information by participants and the protection of personal information. Electronically delivered documents must be furnished in a manner consistent with paper delivery of documents, notice must be provided to participants or beneficiaries that a paper version is available, and the paper version must be furnished on request. The DOL rules apply to two categories of recipients: 1) participants who are able to access electronic documents at a location where the participant is reasonably expected to perform job duties and 2) participants and beneficiaries who have consented to receive documents electronically. Under the IRS rules, plan administrators must take appropriate measures to ensure actual receipt of required plan information and must provide a clear statement of the individual’s right to receive a paper version of the notice or consent form. Again, participants may consent to the electronic delivery of notices or the plan administrator must advise participants that a written copy of the notice is available at no additional charge, and participants must be effectively able to access the electronic medium used to provide the notice. Similarly, the SEC guidelines allow for posting of proxy materials and prospectuses on the Internet as long as individuals are provided with a notice of the availability of the proxy materials.
The DOL request for information published in the Federal Register includes a set of inquiries being reviewed by the DOL in its examination of existing rules. Plan administrators can confirm compliance with electronic media disclosures by reviewing the DOL summary (http://s.dol.gov/E2) or the basic regulations issued by the three agencies or by checking with counsel on the appropriate use of electronic media. (29 CFR Part 2520; published in Vol. 76, No. 67, Federal Register of April 7, 2011)