As I have discussed previously on Dickinson Wright's All Things HR Blog, the Department of Labor's ("DOL") disclosure regulations with respect to electronic disclosure of ERISA plan-related documents and notices are woefully out of date, not having been updated in more than fifteen years. For example, the basic DOL rule continues to be that employers may not provide electronic disclosures to employees that do not have access to their employer's electronic information system as an integral part of their job duties without going through a series of burdensome requirements. It appears that the DOL may finally be ready to modernize those rules.
In August 2018, President Trump signed an Executive Order on "Strengthening Retirement Security in America." Part of that Executive Order requested a review from the Secretary of Labor and the Secretary of Treasury on the potential for "broader use of electronic delivery as a way to improve the effectiveness of disclosures and to reduce their associated costs and burdens." Consistent with that order, the DOL has delivered a proposal entitled "Improving Effectiveness of and Reducing the Cost of Furnishing Required Notices and Disclosures" to the Office of Management and Budget ("OMB") for its review. We do not yet have the exact language of the proposal. However, once OMB completes its review (generally within 30 days of submission), it will be published in the Federal Register.
In May 2019, a number of organizations including the U.S. Chamber of Commerce delivered a letter to the DOL requesting that the DOL prioritize electronic delivery as a part of rulemaking to reduce costs and burdens as suggested by the Executive Order. It is possible that the new DOL rules will broaden an employer's ability to disclose benefit documents by electronic means, but allow participants to opt-out of electronic delivery.
Conclusion
Many employers with a mixed workforce (i.e., with employees who do not have work-related computer access who require the additional accommodations under the current DOL rule referred to above) conclude that complying with the existing onerous electronic disclosure requirements is not feasible. If the proposed rule incorporates the suggestions made by the U.S. Chamber of Commerce and others, this could result in a significant savings in time and printing costs for many employers.
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