What Does E-Delivery Mean for My 401(k) Plan?

September 03, 2020

In May, the DOL passed a new regulation that allows plan administrators to deliver retirement plan documents to participants online. This is a significant departure from previous rules surrounding plan disclosures. So what does this mean for your 401(k) plan?

Participants first receive an Initial Notice of Internet Availability

First, plan participants will receive an initial notice in the mail. This is a one-time paper notice that gives the participant a heads up that their plan documents will be online going forward. It confirms their email address and lets them know that the plan documents are available online through their participant account.

The initial notice also includes an opt-out form, which allows the participant to opt out of electronic delivery and continue receiving paper notices. Notably, if a participant is currently receiving paper notices, they’ll need to opt out of electronic delivery to continue receiving paper notices.

Plan sponsors may have to collect email addresses for participants that haven’t yet provided that information. They may also have to provide a work-related email address to a participant who doesn’t currently have an email address. The initial notice can be handed out to participants with other new hire documents, so this might be a good time to get the participant’s email address on file.

Alternate payees and beneficiaries may receive electronic delivery of notices as well, but only if they provide an email address to the plan sponsor.

Participants then receive a Notice of Internet Availability

After participants have received the initial notice, they’ll receive a Notice of Internet Availability. This notice will be sent to participants each time a new document is posted online. Participants who have opted out of the electronic delivery will not receive an NOIA and their plan disclosures will be mailed.

What if an email address is marked as undeliverable?

If a participant’s email address is undeliverable, plan sponsors may use a secondary email address if they have it on file. If not, the plan sponsor must follow up with the participant. If the participant doesn’t have an updated or valid email address, they’ll receive paper copies of the plan disclosures.

For more details on the new regulation, check out this article.

Questions? Contact us at support@erisa.com or 1-800-858-6989.

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