Benefit plan managers seem to be divided on whether distributing more plan notices electronically would have any effect on plan participants’ inability to find, summon the energy to read, or understand the notices.
The Employee Benefits Security Administration (EBSA), an arm of the U.S. Labor Department, posted a request for comments about electronic disclosure requirements for benefit plans earlier this month.
Comments are not due until June 6, but EBSA already has posted 15 electronic disclosure comments, with many coming from managers at small and midsize employers and small benefits firms.
Claudia Jean Hanner of South Sioux City, Neb., says electronic notices are no help at all to most of her company’s 40 employees.
“Most of them do not have internet access,” Hanner says. “When the notices are set up for electronic delivery, many times they are not set up as printable. Then we have no way to present to the employees.”
Sharon Veronica Fox, who works for a bank in Athens, Tenn., says employees should still have the option to see paper documents.
“Many people do not have computers nor the computer literacy to be able to access electronic formats,” Fox says. “As a corporate trustee, I can personally assure you that education is difficult enough to teach the majority of participants about the advantages of a 401(k) and to get them on board to save for retirement. … While we are being thrown into the electronic age, the average employee has little access to computer expertise.”
Jerry Suther of Liberty, Iowa, says everyone should be honest and admit that “probably less than
10% [of employees] ever read the disclosed information.”
“Most people would prefer to pick up the phone and call a Human Resources Contact Center or third party provider and get the information from someone than to spend time reading ‘legal documents’ that they don’t understand and can’t find what they’re looking for,” Suther says.
Employers that want to send information online as the default should be able to do so and have employees without computers get information by calling, Suther says.
Ryan Kennedy, a San Jose, Calif., benefits professional, says electronic plan disclosure programs should be “opt out,” rather than “opt in.”
Employees who still want to get paper documents should have to take active steps to ask for paper documents, Kennedy says.
“This protects the small segment of the population that has no online access from any source but preserves the environment from unnecessary waste,” Kennedy says. “We see many [summary plan descriptions] running over 4 inches of paper per employee these days. For documents that become obsolete quickly in the current environment that is a lot of wasted paper.”
Gloria Gillespie, a Woodstock, Ga., benefits professional, says businesses are being overburdened with excessive disclosure notices and requirements.
“For those people who REQUIRE OR NEED written documents, let them request it and opt out of electronic notification,” Gillespie says.
Today, she says, “electronic notification rules via email are excessively cumbersome as they require read receipts. This is inordinately difficult and costly to do for any employer with more than 20 or so employees.”