A guide to electronic delivery of participant disclosures

As a plan sponsor, you are required to provide certain disclosures (e.g., fee disclosure, summary plan description) to participants. The disclosures can be delivered in paper form — either by mailing a paper copy to each participant, or delivering them in-person at an employee’s worksite. (Simply posting a required disclosure in an employee common area is not acceptable).

Alternatively, disclosures can generally be delivered electronically. But sponsors must follow certain rules when using email to deliver documents that are required to be made available to plan participants under Title I of the Employee Retirement Income Security Act (ERISA), such as the SPD, fee disclosure, QDIA notice and summary annual report.

This guide is intended to provide an overview of relevant electronic delivery rules and assist plan sponsors who may be considering sending a notice or other disclosure via email.

1. Can I send disclosures to participants via email?

Generally, yes, provided certain requirements are met. A common approach is to use work email to send disclosures to active employees, but send paper copies to other participants (e.g., terminated employees, beneficiaries).

If you want to email disclosures to participants other than active employees, such as retirees, the requirements become more complex. In addition to obtaining a personal email, you may need to get the individual’s consent or meet certain requirements, including providing an initial paper notification to individuals. These additional requirements also may apply if a current employee does not regularly use a work email as part of their job duties. See below for more information.

2. How can I email disclosures to current employees?

You can send disclosures to a current employee’s work email if they are “wired-at-work.” In general, that means they use a computer and their employer’s email system as a regular part of their job.

Employees who meet that definition are not required to give affirmative consent to receive disclosures via email. However, the employee must be notified, at the time the disclosure is emailed, of the importance of the document and their right to receive a paper copy.

Note: Employees considered “wired-at-work” typically work jobs requiring a desktop computer, laptop, or other electronic device that has access to their employer’s email system. Simply providing employees access to a computer (e.g. kiosks) is not sufficient.

3. How can I email disclosures to other participants?

For employees who don’t regularly use work email, as well as participants who aren’t current employees, you can still email disclosures provided certain conditions are met.

You can email disclosures to any participant with a valid email address. In addition to work email addresses, you can use personal emails, which can be collected from participants during the hiring or plan enrollment process.

Before sending disclosures via email, you must give individuals a paper notice disclosing that documents will be delivered electronically and identifying the email address that will be used. The notice must include:

• Any instructions necessary to access the document
• An explanation of the right to request and receive a free paper copy of a document, and instructions on how to exercise that right
• An explanation of the right to opt out (free of charge) of electronic delivery altogether, and instructions on how to exercise that right

When sending documents directly, the email must include:

• The subject line “Disclosure About Your Retirement Plan”
• The name of the covered document, and a description of the document if it’s not clear from the name
• A statement of individuals’ right to request and obtain a paper version of the covered document at no cost, and an explanation of how to do so
• A statement of the right to opt out of receiving covered documents electronically without charge, and an explanation of how to do so
• A telephone number to contact the plan administrator or other designated plan representative

Important considerations:

• You must take steps to ensure the continued accuracy of the email address if an employee is terminated (for example, if you were sending documents to a work email, upon termination you must obtain a personal email or deliver the documents via paper mail)
• You must also have procedures for processing and tracking if an individual elects to receive a paper copy of a particular disclosure, as well as if they elect to opt out of electronic delivery entirely and receive all documents in paper form

4. What other method can I use?

In addition to the methods described above, you can email disclosures to any participant if you first get their affirmative consent. Although the other methods do not require consent, plan sponsors who already have consent on file may want to continue relying on that consent for those participants.

Under this method, prior to obtaining a participant’s consent, you must communicate the following information to the individual:

• The types of documents to which the consent would apply
• That they can withdraw their consent at any time, free of charge
• The procedures for withdrawing consent, and for updating the email used for delivering the documents
• The participant’s right to request and obtain a paper version of any document, including whether the paper version will be provided free of charge
• Any hardware or software requirements for accessing and retaining the documents

5. Do I have to use the same delivery method for all employees or disclosures?

No. You can use different delivery methods for different employees or for different documents. For example, you might choose to email disclosures directly to current employees’ work emails and mail paper copies to retired participants.

Note: Regardless of what method you use, you must ensure that you are alerted if an email is undeliverable. In that case, you must take reasonable steps to address the problem, like requesting a new email address or sending a paper copy.

6. How can I find out more?

For more information regarding the rules for delivering plan disclosures to participants, speak with your third-party administrator or call us at (877) 872-5159.

You can also use notice delivery services available in PlanPremier to have Capital Group deliver certain notices to plan participants. Learn ways to simplify your retirement plan notice delivery process or contact us for more information.