Department of Labor (DOL) published its final rule containing a new safe harbor for electronic delivery of participant disclosures required by ERISA. The effective date is July 26 (60 days after publication), but the DOL has made it effective immediately by committing to a non-enforcement policy. The Final Rule does not replace the existing electronic delivery safe harbors contained in DOL regulations, but instead adds two new options. One option is a notice and access approach whereby recipients receive an electronic notification when a new plan disclosure is available on the plan website or app. The other is e-mail delivery of required disclosures. Both options contain numerous protections for disclosure recipients and are available for delivery of any ERISA-required disclosure other than documents that are only required to be provided upon request. Below are the five steps to implementing the additional safe harbor rule.

1. Identifying Individuals for Electronic Delivery: A plan must have an electronic address (email address or a mobile phone number) for any recipient you intend to include in the safe harbor. You can rely on an employer-provided electronic address if it is used for a purpose in addition to delivery of disclosures.
2. Deliver Initial Paper Notice: There is a one-time requirement to notify recipients on paper of your intent to use the new safe harbor. This notice can be combined with other materials, but it must be provided on paper to any recipient who will be included in the new safe harbor method. The initial paper notice must contain the following information:
   • Identification of the electronic address that will be used for the recipient
   • Instructions on how to access the disclosures
   • An explanation that disclosures are required to remain available on the website for one year or, if later, until the disclosure document is superseded by a newer version
   • A statement of the right to request a paper version of any disclosure free of charge and an explanation of how to exercise that right
   • A statement of the right to opt out of e-delivery free of charge and receive all disclosures in paper form and an explanation of how to exercise that right
3. Post Disclosure and Deliver a Notice of Internet Availability (NOIA): When a new disclosure is due the plan administrator must post it on the website and, at the same time, deliver electronically a NOIA. The NOIA must contain the following information:
   • A prominent statement saying: “Disclosure About Your Retirement Plan”
   • A statement saying: “Important information about your retirement plan is now available. Please review this information.”
   • The name of the document and, if the name is not self-explanatory, a brief description of the document
   • A website address or hyperlink to where the document can be accessed
   • A statement of the right to receive a paper copy of that document free of charge and an explanation of how to exercise that right
   • A statement of the right to opt out of electronic delivery generally free of charge and an explanation of how to exercise that right
   • An explanation that documents are only required to be maintained on the website for one year or, if later, when they are superseded by their new versions
   • A telephone number to contact a plan representative with questions
4. Monitor Receipt and Respond to Rejected Deliveries: Plan administrators are required to have a system in place to be alerted when delivery of a NOIA to an electronic address is rejected. They are not required to monitor whether the recipient opened the NOIA or accessed the disclosure, only that the recipient received the NOIA. If a delivery is rejected, the plan administrator must promptly take reasonable steps to cure the problem. If the rejection can’t be cured, the recipient is treated as having opted out to paper generally and must receive the document covered by the rejected NOIA as soon as reasonably practicable.
5. Step 5 — Retain Posted Disclosures on Website for Required Period of Time: While general ERISA rules for document retention continue to apply, the safe harbor contains additional rules concerning how long a disclosure must remain available on the website. Documents must remain available for one year after the dates they are posted or, if later, when they are superseded by new versions.

IMA Wealth, 2022