The final version of the Department of Labor’s new rules regarding electronic delivery of required notices was published this past May and took effect July 27th. These new rules will greatly reduce the burden and expense of delivering required participant notices.

Many notices may now be posted to a website or provided via electronic mail and paper delivery is no longer the default. Participants still have a right to receive paper notices but must now affirmatively request this, or affirmatively opt out globally from electronic disclosure.

Existing Law

• Basic Rule for Delivery
  • Notices may be delivered by any means “reasonably calculated to ensure actual receipt of the material.”
• Safe Harbors for Electronic Delivery
  • There are two existing safe harbors for electronic delivery which remain in place. Under these safe harbors, two methods of electronic delivery are deemed to satisfy the basic rule.
    • “Wired at work” Delivery to individuals with computer access at work.
    • “Affirmative Consent” Delivery to individuals who agree to receive notices electronically. Practically speaking, this means the individual has provided an email address.
  • Notices may be posted to a website so long as participants receive a notice with a link to the website.

What Has Changed

• New Opt-out Safe harbor
  • Allows delivery of notices by means of a “continuous access website.”
• Preliminary Paper Notice
  • In order to take advantage of this new safe harbor, plan sponsors must first send participants a one-time paper notice that describes the new process for delivery in detail and informs participants they have the right to request paper notices.
• Notice of Internet Availability
  • In addition to the preliminary notice, participants must receive a “Notice of Internet Availability” (NOIA) whenever a notice is posted to the website. This may be delivered electronically. The following can be combined into a single NOIA;
    • Summary Plan Descriptions
    • Annual fee notice
    • QDIA Notice
    • SAR
    • Annual funding notice
  • Excluded are the following:
    • Summary of Material Modifications
    • Blackout notices
    • Investment mapping notices
    • Fee and investment changes notices
    • Quarterly account statements
  • This new safe harbor does not apply to notices required by the Internal Code such as the rollover notice and the auto-enroll notice. It is anticipated the Internal Revenue Service will follow the Department of Labor’s lead on electronic delivery.

Retirement plan providers are working diligently to update their service models so they can assist plan sponsors with fulfilling their disclosure requirements. We expect significant activity around this topic over the next year.

Representatives offer products and services using the following business names: Summit Group of Virginia LLP – insurance and financial services | Ameritas Investment Company, LLC (AIC), Member FINRA/SIPC – securities and investments | Ameritas Advisory Services (AAS) – investment advisory services. AIC and AAS are not affiliated with Summit Group of Virginia LLP. Products and services are limited to residents of states where the representatives are registered. This is not an offer of securities in any jurisdiction, nor is it specifically directed to a resident of any jurisdiction. As with any security, request a prospectus from your representative. Read it carefully before you invest or send money. A representative will contact you to provide requested information. Representatives of AIC and AAS do not provide tax or legal advice. Please consult your tax advisor or attorney regarding your situation.