Who May Receive Documents Electronically?
There are two categories of individuals who may receive disclosures electronically:
- Participants who work at a computer
- Participants that do not work at a computer may still receive emailed notices provided that:
- the participant consents
- prior to consent, the participant is given a summary of documents and informed that consent is revocable
How Must Employers Distribute Notices Electronically under the Safe Harbor?
Employers must be conscious of how they provide required disclosures. Many use their company website to post them. While this is allowable, the following additional rules must be met:
- The document must be easily accessible from the company website's home page
- Access should be restricted by password
- A prominent notice should appear on the home page stating that the document contains important information regarding plan rights
- Notice of each posting must be provided
- Documents should remain on the website for a reasonable period of time
Regardless of the specific electronic method employed, plan sponsors must ensure confidentiality and that delivery results in actual document receipt.
Should Employers Consider Electronic Distribution of Notices?
Absolutely! Technology is inescapably pervading every facet of our lives. While there are a few requirements to abide by, there are vast benefits to electronic delivery including cost savings (no more paper/postage to purchase, labor savings, etc.), environmental consciousness, quicker dissemination of information, higher likelihood of readership and overall more efficient retirement plan operation. Ask your plan advisor to add 'electronic participant notice distribution' to your next retirement committee meeting agenda.