Delivering Participant and Employee Notices Electronically
Historically, hand delivery (including postal mail) has been the method of transmission for mandatory notices, such as the blackout notice. In recent years, the DOL and IRS have issued regulations that provide for electronic delivery of certain retirement plan notices, including a plan blackout notice, as detailed below. If you wish to transmit this information electronically, please read on for important information related to electronic delivery of certain retirement plan information. Both IRS and DOL electronic delivery requirements may apply to a blackout notice based on the information contained in the notice.
IRS Electronic Disclosure Requirements: A plan sponsor may provide notices without obtaining a participant’s advance consent if the participant is able to “effectively access” the electronic medium used to provide the notice and is notified that he/she can request a paper copy of the notice free of charge at any time. The IRS has not prescribed specific standards for “effective access” but distribution to worksite e-mail addresses will likely satisfy the standard. If an employee is terminated but must be provided the notice (terminated employee with an account balance in the plan), the notice(s) must be mailed to the accountholder.
DOL Electronic Disclosure Requirements: Plan Sponsors can send documents electronically to current employees at their worksite e-mail addresses (not personal addresses) without obtaining advance consent if the following requirements are satisfied:
- The participant is able to access the documents at any location where he/she is reasonably expected to perform duties as an employee. This allows for electronic delivery to employees who may not be physically present on the worksite on a regular basis (e.g. employees who work from home or travel frequently); and
- The documents must be sent to a work email address, not a personal email address; and
- Access to the employer’s information system is an integral part of the employee’s job responsibilities; and
- Plan sponsors must take appropriate and reasonable steps to ensure that the electronic delivery system:
- Provides notice to participants that the document is available and apprises participants of the document’s significance;
- Results in actual receipt by participants (use return receipt or undeliverable email features)
- Protects the confidentiality of information and unauthorized access of the information
- Plan sponsors may also furnish communications through an intranet or corporate website. A plan sponsor must send a paper or email notification to announce that the document is available, with instructions that direct the employee to its location on your intranet and the notice must be made available for a reasonable period of time.
- The notice must be mailed to any terminated employees or beneficiaries with an account balance in the plan.
If these requirements are satisfied and the annual notice is delivered electronically, the IRS and/or DOL electronic delivery regulations will be presumed to have been satisfied, commonly referred to as a “Safe Harbor.”
Additional information about electronic delivery can be found at the following IRS and DOL sites:
Leading Retirement Solutions
(206) 430-5084 phone
(800) 974-2814 (toll free)
service@leadingretirement.com
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