Four Steps for Electronic Delivery of Retirement Plan Notices

Sponsoring a retirement plan involves more than making sure that contributions are deposited on time.  The employees who are eligible to participate in their company retirement plan must be provided information about the plan from beginning to end and all of the time in between.  Many notices must be provided to the plan participants every year.  Some of the notices that a plan may be required to send include:electronic delivery of retirement plan notices

  • Summary Plan Description
  • Automatic Enrollment information
  • Qualified Default Investment Arrangement
  • Annual Funding Notice
  • Safe Harbor Notice
  • Summary Annual Report 
  • Fee Disclosure
  • Blackout Notice

Plan information must be provided to all plan participants including current employees and former employees.  The good news is that the Department of Labor (DOL) has drafted some guidelines that allow for notices to be provided via electronic delivery.  By shifting from paper to electronic delivery the notices can be delivered more quickly, and tracked just as easily.

To help you make the shift to electronic delivery of your plan notices, here is a summary of the four steps required by the DOL Technical Release 2011-03 (see http://www.dol.gov/ebsa/newsroom/tr11-03.html for full details)

  1. Email address.  You can use the email address that your company provided to the employee.  Assuming the employee has the ability to access electronic documents while performing duties at work, he or she is considered “Wired at Work” and electronic delivery is suitable.  Otherwise the employee must voluntarily provide you with an email address for the purpose of receiving information about the plan via electronic delivery.
  2. Initial Notice.  The Initial Notice must contain the following information:
    • A statement that the employee will be sent plan-related information in electronic format to the email address that he or she provided, and the receipt of the notice in electronic format is voluntary.
    • A brief description of the information that is being sent, the importance of the information, and how that information may be accessed by the employee.
    • A description of how the plan participant (or beneficiary) can request a paper copy of the information or Notice at no additional cost.  
    • An option about how to opt out of receiving electronic delivery of information.
    • The process by which the participant can update or change his or her email address. 
  3. Annual Notice.  Information in sections 2.b-2.e. above must be included on the Annual Notice.  The Annual Notice may also be provided via electronic delivery if there is evidence that the participant interacted using electronic media some time after the Initial Notice was sent (e.g., submitting email address, responding to read-receipt, logging in to website, etc.).  If there was no electronic communication, then the Annual Notice must be furnished on paper.
  4. Delivery.  Document carefully the addresses to which messages are sent via electronic delivery, and save for your plan records.  Take advantage of return receipt or read receipt, undeliverable mail messages, etc. to insure that the information was received.

Other best practices for electronic delivery include:

  • Simplicity. Messages that are sent through your electronic delivery system should be written so that they are easy to understand.
  • Confidentiality. The electronic delivery system should be set up to protect the confidentiality of the person receiving the information.
  • Trial run. You may wish to have a trial run of your electronic delivery system 30-90 days in advance of the Notice deadline to make sure you have time to work out any kinks.


We are in a wired world, and electronics allow us to sort and file important information at a lower cost.  Plan notices are a natural for electronic delivery as long as care is taken to send each notice, and you document the delivery to the appropriate individuals.  Click here if you would like for us to review with you the notices required for your plan, or if you would like to discuss having Benefit Resources help you establish an electronic delivery program for your plan notices.

 

You might also be interested in:

The Complete Guide to Choosing, Setting Up & Maintaining A Company Retirement Plan

5 Best Practices for Pension Administration

 

Visit The Learning Center

 

Image courtesy of nuchylee / FreeDigitalPhotos.net

Topics