DOL Issues Final Regulations on Electronic Disclosure Safe Harbor for Retirement Plans


The U.S. Department of Labor (DOL) released final regulations on May 21, 2020 that will allow employers to post retirement plan disclosures online or deliver them to employees by email, as a default. According to DOL’s Fact Sheet, the regulations are written to enhance the ability of employers to provide retirement plan disclosures electronically, reducing administrative expenses for employers and making the disclosures more readily accessible and useful for employees.

The new safe harbor rules will be effective 60 days after publication in the Federal Register, scheduled for May 27, 2020.

The DOL estimates over the next decade the new rules will save approximately $3.2 billion in net costs for retirement plans covered by the Employee Retirement Income Security Act of 1974 (ERISA). The plans that relied on the previous rules will eliminate significant materials, printing, and mailing costs associated with furnishing printed disclosures.

Furthermore, DOL anticipates in the short term, the rules will immediately assist employers and the retirement plan industry as they face a number of economic challenges due to the 2019 coronavirus (COVID-19) National Emergency, as well as logistical and other impediments to compliance with ERISA’s disclosure requirements.

With the issuance of these final regulations, employers who sponsor retirement plans now have additional ways to disclose information, which are intended to benefit employees and retirees by enhancing the availability and effectiveness of communications about their retirement savings.

Under the new regulations, employees will be able to decide how they would like to receive their retirement plan information.


According to the DOL, there are approximately 700,000 retirement plans and approximately 137 million participants covered by ERISA.

ERISA-covered retirement plans are required to furnish multiple disclosures each year to participants and beneficiaries. The exact number of disclosures per year depends on the specific type of retirement plan, its features, and in some cases the plan’s funding status.

Delivery methods for ERISA disclosures must reasonably be calculated to ensure that employees actually receive the disclosures. Prior to the release of these new regulations, to deliver disclosures electronically, plan administrators used a regulatory safe harbor established by the DOL in 2002. That 2002 safe harbor has been widely criticized for setting certain conditions that are difficult to satisfy, thus hindering broader use of electronic delivery.

As noted in my article, “Retirement Security and Disclosure Burdens” (posted on our firm’s website in September 2018), the President issued Executive Order 13847, entitled Strengthening Retirement Security in America, on August 31, 2018. This EO directed the DOL to review whether regulatory or other actions could be taken to make retirement plan disclosures more understandable and useful for participants and beneficiaries and to focus on reducing the costs and burdens that retirement plan disclosures impose on employers and others responsible for their production and distribution. In response, the DOL published proposed regulations seeking public comments about electronic disclosure methods.

New Voluntary Safe Harbor for Retirement Plan Disclosures

The final regulations now establish a new, voluntary safe harbor for retirement plan administrators who want to use electronic media, as a default, to furnish covered documents to covered individuals, rather than sending potentially large volumes of paper documents through the mail.

The new safe harbor permits the following two optional methods for electronic delivery:

Website Posting. Plan administrators may post covered documents on a website if appropriate notification of internet availability is furnished to the electronic addresses of covered individuals.

Email Delivery. Alternatively, plan administrators may send covered documents directly to the electronic addresses of covered individuals, with the covered documents either in the body of the email or as an attachment to the email.

The new regulations provide that retirement plan administrators who comply with the safe harbor rules will satisfy the statutory requirements under ERISA to furnish covered documents to covered individuals. Interestingly, the safe harbor adopted on May 21 does not supersede the 2002 safe harbor; the 2002 safe harbor remains in place as another option for plan administrators.

A plan administrator may use this safe harbor only for “covered individuals.” To be a covered person, the individual must be entitled under ERISA to receive covered documents and must have a valid electronic address (e.g., email address or smart phone number).

Protecting Plan Participants

The new safe harbor rules set forth in the new regulations include a number of protections for covered individuals:

Right to Paper. Covered individuals can request paper copies of specific documents, or opt out of electronic delivery entirely, at any time, free of charge.

Initial Notification. Covered individuals must be furnished an initial notification—on paper—that the way they currently receive retirement plan disclosures (e.g., paper delivery in the U.S. mail) is changing. The notice must inform them of the new electronic delivery method, the electronic address that will be used, and the right to opt out if they prefer paper disclosures, among other things. The notice must be given to them before the plan may use the new safe harbor.

Notifications of Internet Availability. Covered individuals generally must be furnished a notice of internet availability (NOIA) each time a new covered document is made available for review on the internet website.

  • To avoid “notice overload”, the final rule permits an annual NOIA to include information about multiple covered documents, instead of multiple NOIAs throughout the year.
  • The NOIA must briefly describe or identify the covered document that is being posted online, include an address or hyperlink to the website, and inform the covered individual of the right to request paper copies or to opt out of electronic delivery altogether.
  • The NOIA must be concise, understandable, and contain only specified information.

Website Retention. Covered documents must remain on an internet website until superseded by a subsequent version, but in no event for less than one year.

System Check for Invalid Electronic Addresses. Plan administrators must ensure that the electronic delivery system is designed to alert them if a participant’s electronic address is invalid or inoperable. In that case, the administrator must attempt to promptly cure the problem, or treat the participant as opting out of electronic delivery.

System Check at Termination of Employment. When a plan participant leaves her or his job, the plan administrator must take steps to ensure the continued accuracy and operability of the person’s employer-provided electronic address.

Effective Date & Immediate Availability of New Electronic Disclosure Rules

The new safe harbor rules will be effective 60 days after their May 27, 2020 publication in the Federal Register. The DOL, as an enforcement policy, and in keeping with broader relief policies in place in response to the COVID-19 pandemic, will not take any enforcement action against a plan administrator that relies on this new safe harbor before the effective date.


Jump to Page