<nobr>Jun 6, 2011</nobr>

ERIC Urges DOL to Expand Safe Harbor for Electronic Disclosure by Employee Benefit Plans

ERIC News Release
For Immediate Release: June 6, 2011

Washington, D.C. -- The ERISA Industry Committee (ERIC) on June 3 urged the Department of Labor (DOL) to expand its safe harbor for electronic disclosure for employee benefit plans, arguing that the current standard is too restrictive.

ERIC's comments are in response to a Request for Information (RFI) to explore whether to expand the current disclosure standards, taking into account current technology, best practices and the need to protect the rights and interests of participants and beneficiaries.

The last formal adoption of electronic disclosure by DOL was in 2002 under section 404(c) of the Employee Retirement Income Security Act (ERISA), which only allowed the use of electronic disclosure if the employer's electronic system was an integral part of the employee's duties or the participant has affirmatively consented to electronic delivery.

ERIC argues that the number of people who have access to the internet and electronic communications has grown exponentially in the last decade, and that DOL's existing safe harbor is too restrictive, particularly the requirement to obtain affirmative consent unless access to the applicable electronic medium is an "integral part" of the employee's duties.

"We recognize that not everyone has Internet access and that some people prefer to receive paper in the mail. However, we do not believe these facts justify the burdens of the existing consent requirements," said ERIC President Mark Ugoretz. Moreover, Ugoretz said in a separate statement, "The way people receive information is changing daily. In many instances, if we do not make electronic access the default, the growing number of people who ignore paper in favor of electronic access will be left out of the loop, the very thing the paper advocates are concerned about."

ERIC offers a detailed proposal to expand the safe harbor that would provide electronic disclosure to be the default from which participants could opt out. ERIC said its proposal will provide sufficient protection for individuals who do not wish, or are not able, to receive communications electronically.

ERIC also urges the DOL to adopt Treasury's "effective ability to access" standard published in 2006, noting that a paper opt-out notice should not be required for anyone who has access to the applicable electronic medium. The fact that some individuals still prefer paper does not justify defaulting everyone to paper, ERIC argues. "In short, most employees today have access to electronic media through countless devices, and they use electronic media even if access to electronic media is not an integral part of their duties," Ugoretz said.

Finally, ERIC urges coordination among the Departments of Labor and Treasury, and the Securities and Exchange Commission to develop a single disclosure standard that would benefit plan sponsors, participants, and beneficiaries. A single set of rules would reduce the incidence of inadvertent noncompliance and ease the burden of learning and implementing multiple sets of rules, the letter says.

A link to ERIC's comment letter appears below.

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For more information:
Ted Godbout
Director, Communications
The ERISA Industry Committee
1400 L Street, NW, Suite 350
Washington, DC 20005
Phone: (202) 789-1400
tgodbout@eric.org
www.eric.org
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The ERISA Industry Committee (ERIC) is a non-profit association committed to representing the advancement of the employee retirement, health, and compensation plans of America's largest employers. ERIC's members provide benchmark retirement, health care coverage, compensation, and other economic security benefits directly to tens of millions of active and retired workers and their families. ERIC has a strong interest in proposals affecting its members' ability to deliver those benefits, their cost and their effectiveness, as well as the role of those benefits in the American economy.

ERIC Comments on Electronic Disclosure RFI

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