As the U.S. Department of Labor considers its next step on a proposal issued in the autumn that would allow retirement plan sponsors to deliver their plan disclosures online to 60 million American plan participants, a new survey finds that not all investors want to receive their investment information electronically.

In fact, only about four in 10 investors (38%) say they prefer to receive communications from their plan providers exclusively via email or an online portal, according to the Secure Retirement Institute (formerly LIMRA SRI), which surveyed 721 Americans who save in a retirement plan to find out how they preferred to get their retirement plan information. 
 
In contrast, 26% of investors still prefer to receive only paper copies of their retirement plan communications, while 32% want to receive both electronic and hard copies of retirement plan statements and documents, according to ““Getting Retirement Communications Right: Understanding Consumer Behavior and Preferences.” Four percent of investors said they have no preference.

The primary reason for preferring paper communications is recordkeeping (61%).

More than a third (34%) also say paper communications are easier to read and they are more likely to read the communications in paper form.

The results provide a “know-your-customer” reality check for investment advisors and broker-dealers, as they work toward creating the new disclosures that Regulation Best Interest will require when it goes into effect June 30. The takeaway from this survey is simple: Just because you can deliver disclosures online doesn’t mean that all clients want that.

Security risk was cited by 3 in 10 consumers as the reason they prefer paper copies of their investment statements.  Interestingly, millennials and adult Gen Z consumers are the most wary of emailed investment statements being stolen online, the survey found.

For those who favor electronic communications, more than half (54%) say it is because they can access the information from anywhere in the world where they have internet access.

Perhaps surprisingly, the desire for online delivery of their investment information increases with age. Forty two percent of  Gen Z/millennials favor electronic delivery because of ease of access, followed by 54% of Gen Xers and 68% of baby boomers.
Forty-seven percent of investors say it is easier for recordkeeping and 45% believe electronic communications are more environmentally friendly.

Being environmentally friendly was especially appealing to women, those with more than $100,000 in household assets, and those who are currently working and not retired, SRI found.

“Given the cost savings, it would be advantageous for plan sponsors and recordkeepers to persuade their workers to accept electronic communications,” SRI said in a blog.

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.