Department of Labor Proposes New Default Electronic Disclosure Safe Harbor

by Alex Valls Wilde

On October 23, 2019, the Department of Labor (“DOL”) released proposed regulations titled “Alternative Method for Disclosure Through Electronic Media – Notice and Access.” The regulations propose a new alternative safe harbor for the electronic distribution of retirement plan (but not welfare plan) disclosures. While plan sponsors cannot rely on this new safe harbor until finalized, this release provides insight into anticipated changes that (finally!) address the costs and complications of plan administration.  The new electronic disclosure safe harbor includes the following features:

  • Covered Plans. The safe harbor applies to defined benefit retirement plans (such as pension plans) and defined contribution retirement plans (such as 401(k) plans). The safe harbor does not apply to employee welfare benefit plans, but the hope is that the safe harbor will be expanded to cover welfare plans in the future.


  • Covered Individuals. Online disclosures can be made to any participant, beneficiary, or other individual entitled to receive “covered documents” (discussed below) if the individual has provided the plan sponsor with an email address or a cellphone number. Individuals with an email address or a cellphone number provided by the employer are treated as meeting this requirement. When a covered individual’s employment is terminated for any reason, the plan sponsor must take reasonable measures to ensure the continued accuracy of the covered individual’s email address or cellphone number, such as requesting new contact information.


  • Covered Documents. The safe harbor allows plan sponsors to electronically disclose any document that the plan sponsor is required to furnish to participants and beneficiaries under Title I of ERISA, except for documents that the plan sponsor is required to furnish upon request. Covered documents include:
    • summary plan descriptions (“SPDs”)
    • summary of material modifications (“SMMs”)
    • summary annual reports
    • annual funding notices
    • investment-related disclosures
    • qualified default investment alternative notices
    • pension benefit statements (including quarterly statements for 401(k) plans)
    • blackout notices


  • Requirements:
    • Plan sponsors must first provide covered individuals with a paper Notice of Internet Availability satisfying specific requirements regarding the online availability of covered documents at the time the covered document is made available on a website. This initial notice informs covered individuals that they will receive future retirement plan information electronically and that they have the right to request paper copies or opt-out of electronic delivery. Plan sponsors may furnish one combined Notice of Internet Availability to covered individuals each plan year. A combined Notice of Internet Availability can be furnished for most documents, but certain documents like blackout notices cannot be included in the combined Notice of Internet Availability.
    • Plan sponsors must ensure that documents are available on a website accessible by covered individuals and that the covered documents are presented on the website in a widely available format that can be read online and clearly printed on paper (such as a PDF).
    • Plan administrators are responsible for:
      • maintaining the website and taking reasonable steps to guard against undeliverable or invalid email addresses (if an email address is invalid, the plan sponsor must assume the individual has opted out of electronic disclosures and proceed with paper disclosures);
      • maintaining the website and taking reasonable measures to ensure that the website protects the confidentially of personal information relating to any covered individual; and
      • ensuring that covered documents remain on the website until the covered document is superseded by a new version of the document.

Next Steps

The new electronic disclosure safe harbor is a welcome addition to the current guidance, but will not become effective until 60 days after the final rule is published. Once finalized, it is anticipated that this new electronic disclosure safe harbor will significantly reduce the burden and cost to plan sponsors of furnishing retirement plan disclosures to individuals.  Unfortunately, plan sponsors may not rely on this safe harbor before the regulations are finalized.

The Sherman & Howard Employee Benefits Team is available to answer any questions plan sponsors may have about their disclosure obligations.