Sixty percent of retirement plan account holders who currently receive paper
communications would accept receiving communications via a secure online portal. Findings suggest promoting the security, easy access and recordkeeping as well as environmentally friendly aspects of electronic communications can help persuade plan participants to switch to electronic communications.
Approximately 60 million Americans save for retirement through an employer-sponsored retirement plan such as a 401(k) or 403(b) plan. At least quarterly, these retirement plan participants receive account statements, disclosures and written communications to help them monitor their savings, understand the choices they have made within the accounts and the costs associated with these investments.
Goodbye Paper?
In October 2019, the Department of Labor proposed a rule allowing Erisa retirement plan disclosures to be posted online to reduce printing and mail expenses for employers and make disclosures more readily accessible and useful for America’s workers, consistent with an executive order from President Trump.
According to the DOL this would save an estimated $2.4 billion in costs over the next 10 years by eliminating materials, printing and mailing costs associated with providing printed disclosures.
“This proposal offers Americans choice in how they receive important retirement information,” said U.S. Secretary of Labor Eugene Scalia. “By adjusting for modern technology, the Department can help save billions of dollars in costs for the U.S. economy. The U.S. Department of Labor is focusing on rulemaking that eliminates unnecessary burdens while furthering the needs of the wage earners, job seekers, and retirees of the United States.”
The proposal offers a safe harbor for employers who want to make retirement plan disclosures accessible on a website, rather than sending volumes of paper documents through the mail.
Plan participants would be notified that information is available online, including instructions for how to access the disclosures and their right to receive paper copies of disclosures. The proposal includes additional protections for retirement savers, such as standards for the website where disclosures will be posted and system checks for invalid electronic addresses.