DOL Releases Interim Guidance on Electronic Delivery of Participant-Directed Retirement Plan Disclosure


When it published a final rule on disclosure requirements for participant-directed retirement plans in October 2010, the U.S. Department of Labor (DOL) reserved for further guidance whether this disclosure could be delivered in electronic form. DOL has now issued interim guidance on acceptable approaches for electronic delivery under this rule.

Participant-Directed Plan Disclosure Rule

The participant-directed plan disclosure rule establishes new requirements for the disclosure of general plan-related information, and investment-related information, to plan participants and beneficiaries who are permitted to direct investments for their retirement plan accounts. The rule applies to plan years beginning on or after November 1, 2011, although the earliest date on which disclosures will have to be made under a transition rule is May 31, 2012 (which is the applicable date for calendar-year plans).

The final rule reserved a subsection on the manner of furnishing the required information to give DOL an opportunity to seek public comments on the subject of electronic delivery. DOL requested public comments on the issue this past April. The 80 comments received expressed different views on DOL's current "safe harbor" rule on electronic disclosure to plan participants, which generally permits electronic disclosure to participants who have the ability to effectively access electronic documents in their workplaces, but requires affirmative consent from those who do not use a computer as an integral part of their workplace duties. Some comments said that the affirmative consent requirement in the safe harbor rule is outdated and limits plans from realizing the benefits of using electronic media; others were concerned that by not requiring affirmative consent in every instance, the rule does not adequately ensure that participants will receive the required disclosures.

Several comments requested that DOL extend to the disclosure rule a "good-faith compliance" standard applicable to the furnishing of participant benefit statements required by the Pension Protection Act of 2006. This standard is met where participants have continuous access to information through one or more secure websites, provided that the participants are furnished with notification that explains the availability of the information and how it may be accessed, and they are given the opportunity to request a paper version free of charge.

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