In 2018, an Executive Order was issued directing the DOL to review whether regulatory actions could be taken to make retirement plan disclosures more understandable and useful for participants and beneficiaries. The Order specifically emphasized that the review should address broader use of electronic delivery as a way to improve the effectiveness of the disclosures while also reducing the cost and burden on plan administrators.

In October of 2019, the DOL published a proposed regulation that would create a new, separate safe harbor for plan administrators who wish to use electronic media as the default means of providing retirement plan notices and required disclosures, rather than as a limited "alternative" to delivery of paper. The final rule basically follows the 2019 proposal, with minor tweaks based on comments the DOL received.

New voluntary safe harbor

The new safe harbor is limited to retirement plan disclosures. It does not apply to ERISA-required notices for health or welfare plans, and does not apply to notices required solely by the IRS, such as the Special Tax Notice that must be provided in advance of an "eligible rollover distribution," or notices required by another government agency.

In addition, the safe harbor is limited to certain "covered documents" that are provided to "covered individuals" who have a valid electronic address (such as an e-mail address or a smartphone number). The new safe harbor does not supersede the 2002 safe harbor; instead, the 2002 safe harbor remains in place as an additional option for plan administrators.

Protection for plan participants

The new safe harbor includes certain protections for covered individuals, including the following:

Right to paper — Covered individuals may request paper copies of specific documents, or globally opt-out of electronic delivery entirely, at any time, free of charge.

Initial notification — Administrators must furnish covered individuals with an initial notification, on paper, advising the individual that all future notices will be delivered electronically, unless they exercise their right to opt-out if they prefer paper. This notification must be given before the plan can use the new safe harbor, and it must specifically describe the delivery method and the electronic address to which notices will be sent.

Notification of internet availability — If a given notice or disclosure is going to be posted on the administrator's website, covered individuals must generally be furnished a notice of internet availability (NOIA) each time a new covered document is made available for review on the website. However, the final rule does permit an "annual" NOIA to include information about multiple covered documents, rather than providing multiple NOIAs throughout the year. The NOIA must describe the document that is being posted, it must include an address or hyperlink to the website, and it must remind covered individuals of their right to request a paper copy of the document, as well as their continuing right to opt-out of future electronic delivery altogether.

Website retention — Documents that are "delivered" by website posting must remain on the website until superseded by a subsequent version, but in no event for less than a year.

System check for invalid electronic address — Regardless of which of the two optional methods of delivery is used, administrators must ensure that the system is designed to alert them if a covered individual's electronic address is invalid or undeliverable. There is a separate requirement to verify the continued accuracy and operability of the covered individual's electronic address following such individual's termination of employment.