The Labor Department on Tuesday issued a proposed rule allowing for electronic disclosure of retirement plan information in lieu of paper statements.
Preston Rutledge, head of Labor’s Employee Benefits Security Administration, said at the American Society of Pension Professionals and Actuaries’ annual conference in National Harbor, Maryland, just outside Washington, that the notice of proposed rulemaking will be published in the Federal Register Wednesday.
“This has been a priority issue for us for a number of years,” Rutledge said. “ERISA requires a number of disclosures and rights,” he said, adding that Labor has “heard repeatedly they [participants] need electronic disclosures.”
The electronic disclosure plan was developed by EBSA and issued in response to an executive order from President Donald Trump, Strengthening Retirement Security in America. The order called for the Labor secretary to review actions that could be taken to make retirement plan disclosures more understandable and useful for workers, while also reducing the costs and burdens the disclosures impose on employers and plan administrators.
Labor said that it expected the proposal to expand use of internet technology to furnish covered disclosures to workers and to result in approximately $2.4 billion net cost savings over the next 10 years for ERISA-covered retirement plans by eliminating materials, printing and mailing costs associated with furnishing printed disclosures.
“This proposal offers Americans choice in how they receive important retirement information,” said Labor Secretary Eugene Scalia in a statement. “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.”
Labor also issued a separate request for information on whether additional steps could be taken to improve workers’ retirement plan disclosure experience. The RFI contains detailed questions covering a broad range of disclosure-related topics, including scope, content, design and delivery.
Rutledge also noted at the ASPPA event that the RFI under Labor’s final rules to help small businesses offer retirement plans to their workers via association retirement plans ends on Oct. 29.
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