During the end of May, the US Department of Labor (DOL) adopted a new and additional safe harbor allowing plan administrators to use electronic media, as a default, to furnish covered documents to participants and beneficiaries. The adoption alleviates a costly endeavor, ease of capital, and environmental effects, whereby forgoing the requirement to mail potentially large volumes of paper documents. Plan administrators will have to satisfy specified conditions, such as providing participants and beneficiaries with a notice that certain disclosures will be made available on a website, or to furnish disclosures via email.
Additional provisions in the safe harbor plan
There are some additional provisions featured in the safe harbor plan where plan administrators may post covered documents on a website if appropriate notifications of Internet availability are furnished to the electronic addresses of covered individuals. Additionally, plan administrators may send information directly to the electronic addresses of covered individuals, with the covered documents either in the body of the email or as an attachment to the email.
The decision for change was based largely on surveys where an overwhelming amount of respondents indicated they regularly use and have access to the Internet. The feedback thus allowed for a change in how the communication occurs without degrading the valuable information provided.
The new safe harbor is effective and applicable beginning on July 27, 2020. Plans taking advantage of the new safe harbor adoption will be able to eliminate significant costs associated with materials, printing, and mailing costs typically associated with the mailings. The change is welcomed as businesses and Plans continue to navigate a complex and challenging environment.
Calvetti Ferguson works with middle-market companies, private equity firms, and high-net-worth individuals nationwide. Regardless of the complexity of the compliance, assurance, advisory, or accounting need, our team is ready to help you. Please complete the form below, and we will follow up with you shortly.