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Compliance June 10, 2011
Nonprofit Weighs in on Electronic Disclosure Debate
The Pension Rights Center, a nonprofit consumer rights
organization, believes that current safe harbor rules balance the interests of
participants and beneficiaries, and the interests of efficient plan
administration.
Reported by Nicole Bliman
In a letter to the Employee Benefits Security Administration (EBSA), the Pension Rights Center expressed its belief that “the safe harbor should be strengthened by requiring that participants affirmatively consent to the electronic delivery of a Summary Plan Description or the Periodic Pension Benefit Statement, even for employees who work with computers daily.”
The Center pointed out that for individual account plans, the Department of Labor’s (DoL) disclosure rules do not require all investment-related information to be delivered individually to participants. The final regulations for fee disclosure to participants use a layered approach to disclose investment information so that supplemental investment information may be presented on a website. The Center recommends that paper copies be provided upon request.
The Center’s second point was that electronic disclosure should not be the exclusive means of reducing the burden of disclosure requirements for plan administrators. The Center has previously testified that use of model notices and standard language, combining disclosure notices, and tailoring disclosure requirements to the specific notice might be ways to streamline disclosure requirements.
Lastly, the Center brought to EBSA’s attention that email is not necessarily the only form of electronic communication that should be addressed. “We are especially concerned about voice mail and other automated information provided over a telephone connection as a means of electronic disclosure,” the Center wrote in its letter. “It is our view that required pension disclosures cannot be delivered in an understandable manner by voice mail nor are most participants able to record or otherwise retain copies of these disclosures for future reference. Pension disclosures generally are complicated. Voices can be difficult to understand. Automatic phone calls are often ignored. Call-backs can be difficult at best. The Pension Rights Center recommends that the Department of Labor adopt a rule prohibiting use of any voice delivery technology to provide required disclosures.”
The Department of Labor accepted comments on its request for information regarding electronic disclosures until June 6. The Pension Rights Center complete letter is available here.