DOL Proposes Alternative Electronic Delivery Rules for Pension Plans

The Department of Labor (DOL) has proposed an alternative safe harbor for the electronic delivery of disclosures required by Title I of the Employee Retirement Income Security Act (ERISA). The proposed safe harbor, which would apply only for pension benefit plans and not for welfare benefit plans, would allow plan administrators to satisfy the notice and disclosure requirements by using a website on which they would post the required information.

The proposed rule can be found at this link. This alert describes the requirements of the proposed alternative and compares key provisions against the existing electronic disclosure requirements. As noted below, the proposal contains a significant number of new requirements that may prove to be more complicated and burdensome than the existing rules for electronic disclosure.

Effective Date: The proposed effective date is 60 days following publication of the final rule in the Federal Register.

Action Now: Plan sponsors can submit comments on the proposed safe harbor and generally on how ERISA's disclosure scheme may be changed to be more effective, less burdensome, or further streamlined. On this point, Section D of the proposal contains 21 topical questions drafted by the DOL. Comments, identified by RIN 1210?AB90, are due by November 22, 2019, and may be submitted as follows:

  • Federal eRulemaking Portal: Follow the instructions for submitting comments.
  • Mail: Office of Regulations and Interpretations, Employee Benefits Security Administration, Room N-5655, U.S. Department of Labor, 200 Constitution Avenue NW, Washington, DC 20210, Attention: Electronic Disclosure by Employee Benefit Plans, RIN 1210-AB90.


ERISA requires plan administrators to provide various notices and disclosures to participants and beneficiaries. In 2002, the DOL issued regulations that created a safe harbor for allowing some of ERISA's disclosure requirements to be provided by electronic media.1 That safe harbor allowed so-called "wired at work" employees to be automatically enrolled for electronic notifications but required non-wired employees to affirmatively consent to receive notices electronically.

Since 2002, the ERISA Advisory Council, practitioners and stakeholders made numerous requests to the DOL to update its electronic delivery rules. Executive Order 13847, issued August 31, 2018, instructed the DOL to consult with the Secretary of the Treasury to explore potential broader use of electronic delivery to improve the effectiveness of disclosures, reduce their associated costs and burdens, and propose appropriate regulations. In developing the new safe harbor, the DOL reviewed the electronic delivery practices used by other federal agencies and recommendations from other parties such as the ERISA Advisory Council and the Government Accountability Office (GAO).

Overview of the Proposed Safe Harbor

A new regulation section 2520.104b-31 would be added to 29 CFR part 2520 to allow pension plan administrators to use a "notice and access" structure to provide "covered individuals" with "covered documents." Under this approach, the individuals would receive electronic notification when a covered document is available for access on the employer's website.

The DOL intends to let plan administrators use either the old or new safe harbor, or both--selecting the best approach for the plan's population. Therefore, administrators can continue to use the 2002 electronic distribution rules2 for certain covered individuals and/or covered documents and use the proposed safe harbor for others.

Details of the Proposed Safe Harbor

A "covered document" is any document that the plan administrator is required to furnish to participants and beneficiaries pursuant to Title I of ERISA, except for any document that must be furnished upon request. A "covered individual" is a participant, beneficiary or other individual entitled to documents who, as a condition of employment, at the commencement of plan participation, or otherwise, provides an employer, plan sponsor, or plan administrator with an electronic address (e.g., e-mail address or internet connected smart phone telephone number). If an electronic address is assigned by the employer to the employee, then the employee is treated as if he or she provided the electronic address. The DOL requires, as a condition of reliance on the new safe harbor, that an administrator receives an electronic address or number with which to communicate with a covered individual. In addition, the following conditions must be satisfied in order to rely upon the proposed safe harbor:

  1. Initial Notification of Default Electronic Delivery and Right to Opt-Out: Before first using this new safe harbor with respect to a covered individual, the plan administrator must send such participant or beneficiary a one-time paper notification stating that the administrator will be adopting a new method of electronic delivery and that the individual will receive some or all future retirement plan information electronically. This initial notification must inform the individual of the rights to request paper copies and opt out of electronic delivery, and how to exercise those rights. This initial notice must be sent even if the administrator presently makes electronic distribution under the 2002 rules.
  2. Notice of Internet Availability: The plan administrator must furnish each covered individual with a notice of internet availability for each covered document that will be delivered electronically:
    • Timing. The notice of internet availability must be furnished at the time the covered document that is the subject of the notice is made available on the website. A plan that furnishes more than one covered document under the special consolidation rules3, will satisfy the notice of internet availability if the combined notice of internet availability is furnished each plan year, and if the combined notice was furnished in the prior plan year, then no more than 14 months following the date the prior year's notice was furnished. Each covered document must be made available on the employer's website no later than the date on which the covered document otherwise is required to be furnished under ERISA.
    • Content. The notice must contain the following content: (i) a prominent statement such as a title, legend or subject line that reads, "Disclosure About Your Retirement Plan;" (ii) a statement that "Important information about your retirement plan is available at the website address below;" (iii) a brief description of the covered document that communicates key information about its importance; (iv) the internet website address where the covered document is available; (v) a statement of the right to request and obtain a paper version of the covered document free of charge and an explanation of how to exercise that right; (vi) a statement of the right to opt out of receiving covered documents electronically and an explanation of how to exercise that right, and (vii) a telephone number for contacting the plan administrator. Generally, the notice cannot contain any additional information, except relevant pictures, logos, or similar design elements.
    • Form and Manner of Furnishing Notice of Internet Availability. The notice of internet availability should be a concise, clear disclosure that conveys its importance and easily calls the recipient's attention to its content. It must be written in a manner calculated to be understood by the average plan participant, i.e., without double negatives; using short sentences, everyday words, and an active voice; and geared for an 8th grade reading level. The notice must be sent separate from any other documents to the covered individual's electronic address.

  3. Website Requirements. The administrator must ensure maintenance of an internet website at which the covered individual is able to access covered documents. The website address must lead the covered individual directly to the covered document or to a login page that provides, or immediately after logging in provides, a prominent link to the covered document. The covered document must be presented in a widely available format or formats that are suitable to read both online and printed clearly on paper. It also must be searchable electronically by numbers, letters, or words to enable individuals to easily find specific information. The covered document must remain on the website until it is superseded by a subsequent version. If the covered document contains personal information, the administrator is required to take reasonable steps to ensure that the website protects the confidentiality of the information and that the information is not accessible to others without authority. The plan administrator has no affirmative obligation to monitor whether covered individuals visit the specified website or login at the website.
  4. CHEIRON OBSERVATION: Although the proposed safe harbor provides for access to required disclosures on a "website," the DOL invites comments on whether the proposal should explicitly include other internet-based mechanisms, such as multimedia messaging and mobile applications.

  5. Right to Paper Documents or Opt-Out. The administrator must establish reasonable procedures for responding to requests for paper copies, free of charge4, or for allowing participants to opt out of electronic distribution of a covered document. A covered individual who prefers to receive all covered documents via paper must be allowed to globally opt-out of receiving any covered documents electronically, until he or she later consents to receive covered documents electronically. Finally, the system for providing notice of the availability of a document must identify any address returned as undeliverable, so that the plan administrator may implement a back-up procedure, such as sending the notice to an alternative internet address provided by the participant or beneficiary. If there is no alternative address, the administrator must treat the individual as having opted out and must provide the individual with a paper copy of the covered document.
  6. Special Rule for Severance from Employment. For employees who continue participation in the plan after severance from employment, the plan administrator must take action to assure that covered documents continue to be provided electronically. The administrator must ensure the continued accuracy of the electronic address or phone number or obtain a new electronic address or number for the severed individual. The DOL believes this requirement not only ensures effective electronic delivery in the future, but also may serve as a protection against missing participants. However, because it may be difficult to identify severed individuals in multiemployer plans, the DOL is soliciting comments whether this requirement should apply to multiemployer plans.

CHEIRON OBSERVATION: For multiemployer plans, the plan administrator often will not know when a covered individual has severed employment. An alternative may be to identify active employees for whom contributions were not received for several pay periods and mail a letter to them requesting that they confirm their current electronic address. In addition, as a best practice, the SPD and other plan communications always should contain the statement that participants are required to keep the plan administrator informed of their current postal address, email address, and telephone number.

Comparison With Current Safe Harbor

The following shows a comparison between the current safe harbor and the proposed new safe harbor for electronic disclosure:

Comparison of Current and Proposed Safe Harbors


Current Safe Harbor

Proposed Safe Harbor

Covered plans

Pension and welfare plans

Pension plans only

Covered documents

Documents required under Title I of ERISA

Documents required under Title I of ERISA, unless  furnished upon request

Assurance of actual receipt of document

Must take steps to ensure that the system results in actual receipt of document

Not required

Initial notice of electronic delivery

Not required


Advance paper notice of intent to make electronic distribution; ability to request paper document; opt-out options - cannot be sent electronically

Notice of availability for each document

Required notification of documents being delivered electronically; their importance; ability to request paper document - may be sent electronically

Required notice of internet availability covering specific content; combined notice permitted for certain documents - must be sent to individual's electronic address

Must be able to effectively access documents furnished electronically at a location where employee performs services ("wired")

Required for electronic distribution to "wired employees" without consent

Not required


Required for "non-wired" employees 

Not required

Electronic address

Required for "non-wired" employees; employee must provide the address

Required for all covered individuals; employer may assign the address

Electronic distribution for severed participants

Not required


Secure website

Permitted, but not required


Distribution of covered document via email


Not permitted; documents must be placed on website

Opt out provisions

Not required


Provision of Paper Copy



Key word search capability

Not required


Protection of confidential information




Must be same style and format as paper copy

Must be a widely-available format(s) such that the document can be  retained in an electronic format, read online, and printed clearly on paper

Document must remain on website until superseded

Not required



While this new alternative method for electronic distribution eliminates the need to get affirmative elections from those participants and beneficiaries who are not "wired at work," as demonstrated by the chart above, it contains a significant number of new requirements that may prove to be more complicated and burdensome than the 2002 rules for electronic distribution. Therefore, many plan administrators may elect to continue to use the 2002 electronic distribution rules.

Cheiron is an actuarial consulting firm that provides actuarial and consulting advice. However, we are neither attorneys nor accountants. Accordingly, we do not provide legal services or tax advice.

1 See 29 CFR 2520.104b-1(c).

2 Although the proposed safe harbor would have no impact on the current regulatory safe harbor at 2520.104b-1(c), it would, if adopted as a final rule, supersede the relevant portions of FAB 2006-03 (relating to electronic distribution of periodic pension benefit statements); FAB 2008-03 (Q&A 7) (relating to electronic distribution of the QDIA notice); and Technical Release 2011-03R (the revised interim policy on electronic disclosure under CFR 2550.404a-5).

3 Although the proposal generally requires an administrator to furnish a separate notice of internet availability for each covered document, a special rule allows an administrator to furnish one combined notice of internet availability with respect to one or more of the following covered documents: (1) A summary plan description; (2) a summary of material modifications; (3) a summary annual report; (4) an annual funding notice; (5) an investment-related disclosure under 29 CFR 2550.404a-5(d); (6) a qualified default investment alternative notice; and (7) a pension benefit statement. The DOL states that these covered documents represent the most common and recurring disclosures that are made to pension plan participants that are triggered by no event other than the passage of time.

4 Note: only one paper copy of a covered document has to be provided free of charge under this safe harbor.