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PSCA Executive Reports

October 29, 2019

E-Disclosure

On October 22, the Department of Labor (“DOL”) released a proposed rule that seeks to modernize the disclosure rules for ERISA covered retirement plans. If the proposal becomes final, it will be the first comprehensive notice and comment rulemaking regarding how plan administrators communicate with plan participants and beneficiaries since DOL established its electronic disclosure safe harbor 17 years ago. The proposal, titled “Improving Effectiveness of and Reducing the Cost of Furnishing Required Notices and Disclosures” (the “Proposed Rule”), follows on an executive order issued on August 31, 2018 that directed DOL to explore “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.” In DOL’s spring update to its regulatory agenda, DOL described the rule it was working on as not only following the President’s directive but also seeking “to make … disclosures more understandable and useful for participants and beneficiaries.”

PSCA has long been a champion of e-disclosure and has urged DOL for years to issue rules updating its policies on electronic disclosures. PSCA is currently reviewing the Proposed Rule and will circulate a more detailed summary shortly.

DOL will accept comments on the proposal for 30 days. If finalized, the Proposed Rule could lead to a dramatic shift for retirement plans and service providers from paper formats to electronic formats that could lead to greater participant engagement and reduced mailing costs. Notably, the Proposed Rule is limited to retirement plans and does not apply to health and welfare plans.

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