Compliance News | November 6, 2019
On October 23, 2019, the Department of Labor (DOL) published a proposed rule that creates a new voluntary alternative “safe harbor” method of disclosure for sponsors of pension plans that wish to provide required disclosures electronically. The proposed rule would allow plans that satisfy certain criteria to provide disclosures electronically as a default, with an “opt out” available for participants who wish to continue receiving paper disclosures. The proposed rule does not cover health and welfare plan disclosures, which the DOL says it will address in future guidance.
This new alternative safe harbor would be in addition to the existing 2002 safe harbor, which requires a participant to “opt in” to electronic notices. Plan sponsors may not adopt the new alternative until the DOL adopts a final regulation.
Comments on the proposed rule must be submitted by November 22, 2019, 30 days after the date of the proposal. That comment deadline is shorter than the usual 60 days. That fact and the fact that the DOL left other issues about electronic filing for future guidance, appear to indicate the DOL’s strong interest in completing this regulatory process quickly.
These are the highlights of the proposed rule:
Health and welfare plans may continue to use the DOL’s 2002 safe harbor for electronic disclosure of required health plan notices. The DOL notes that it shares jurisdiction on many health plan required notices with the Treasury and Health and Human Services Departments, so guidance will take more time to develop. However, plan sponsors may wish to take the opportunity to submit comments now if they have concerns or recommendations concerning electronic health and welfare plan disclosures.
This page is for informational purposes only and does not constitute legal, tax or investment advice. You are encouraged to discuss the issues raised here with your legal, tax and other advisors before determining how the issues apply to your specific situations.
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