On Tuesday, a coalition of interested parties took to their pens to urge the Department of Labor to allow plan sponsors to make required disclosures electronically. A coalition of 15 trade organizations, including ASPPA, the Financial Services Institute, the Investment Company Institute and SIFMA, wrote a letter to the Employee Benefits Security Administration to argue for a policy that recognizes “electronic communication today is no longer the exception, it is the norm.”
A survey by the SPARK Institute, one of the coalition members, found that interim guidance released by the Labor Department in December does not make electronic disclosure more feasible and lacks incentives for plan sponsors to use it instead of paper disclosures.
“We encourage the Department to pursue a policy that, in operation, would encourage and facilitate the use of modern electronic forms of communication,” the coalition wrote in the letter. “Such a policy would have a direct and beneficial impact on plans, plan sponsors, plan participants and beneficiaries.”
Technical Release 2011-03R clarifies earlier guidance released in September about using electronic media to satisfy disclosure requirements. The revised release is otherwise identical to the earlier issuance, TR 2011-03.
“We are concerned that the guidance in the Technical Release provides little relief beyond that already available through EBSA’s current safe harbor, particularly as it relates to affirmative consent and dependence on paper as the default method of delivery,” Larry Goldbrum, general counsel of The SPARK Institute, said in a statement. “Based on responses to the survey and discussions with other coalition members, it is clear that a substantial majority of service providers do not intend to make use of the Technical Release policy and the required disclosures will be delivered in paper form, rather than electronically.”
Among the chief concerns of the coalition are:
- Existing systems’ inability to support Labor’s interim e-delivery approach without costly changes
- Requiring each participant to approve electronic communications
- The administrative impracticality of the required implementation and monitoring