The DOL recently issued proposed retirement plan electronic disclosure regulations implementing provisions of the SECURE 2.0 Act of 2022 requiring that plan sponsors provide paper benefit statements to participants in certain circumstances (the “DOL Proposal”). ERISA generally requires that defined contribution and defined benefit plans provide periodic benefit statements to participants and beneficiaries for the purpose of summarizing the total benefits accrued under the plan.
The DOL previously issued two separate electronic distribution safe harbor rules in 2002 and 2020 for (i) individuals who have electronic access at work or affirmatively consent to receiving electronic communications (the “2002 Safe Harbor”) and (ii) individuals who provide a valid electronic address to their employers as we previously reported here (the “2020 Safe Harbor” and together with the 2002 Safe Harbor collectively referred to herein as the “DOL Safe Harbors”). By complying with one of the DOL Safe Harbors, retirement plan sponsors are permitted to furnish required plan documents through electronic media, provided that such participants are notified in advance and do not opt out.
Pursuant to the SECURE 2.0 Act, defined contribution plan sponsors must provide at least one paper benefit statement each calendar year and defined benefit plan sponsors must provide a paper benefit statement at least once every three years. However, plan sponsors may avoid this requirement (i) by either relying on the 2002 Safe Harbor with the modifications provided below; or (ii) if the participant affirmatively opts out of receiving benefit statements on paper.
The DOL revised its DOL Safe Harbors as follows:
- 2002 Safe Harbor: Participants who first become eligible to participate and beneficiaries who first become eligible for benefits after December 31, 2025 must receive, prior to the distribution of any electronic benefit statement, a one-time initial paper notification informing them of their right to request hard copies of all ERISA plan documents and the ability to opt out of electronic distributions.
- 2020 Safe Harbor: As a general rule, under the 2020 Safe Harbor, benefit statements are required on paper once per calendar year for defined contribution retirement plans and once every three years for defined benefit retirement plans, unless the participant affirmatively opts into receiving electronic statements. Further, the paper benefit statements must (i) provide participants and beneficiaries with the opportunity to request electronic delivery for any benefit statement that would otherwise be delivered on paper and (ii) include an explanation on the benefit statement as to how to request documents in electronic form along with the authorized plan representative’s contact information. Finally, the plan sponsor cannot charge fees for the paper delivery of benefit statements.
The DOL indicated that until a final rule is issued, it will not take enforcement action against retirement plan sponsors that comply in good faith with the DOL Proposal. Comments to the DOL Proposal (available here) are due by April 27, 2026.