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

For Immediate Release

Washington, DC – 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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All media inquiries to The ERISA Industry Committee should be directed to:

Kelly Broadway, 202.627.1918, kbroadway@eric.org

About the ERISA Industry Committee
ERIC is the only national association that advocates exclusively for large employer plan sponsors on health, retirement, compensation, and paid leave public policies at the federal, state, and local levels. With member companies that are leaders in every sector of the economy, ERIC promotes uniformity and flexibility for nationwide benefit plans.