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New DOL Safe Harbor w/r/t Participant Communication


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1 minute ago, C. B. Zeller said:

Good point, I wasn't thinking about participants who might not have a smartphone.

Still a few out there, and even more that don't know how to use them ?

1 minute ago, C. B. Zeller said:

They could bookmark the page on their phone or save a copy of the disclosure after opening it.

Good point.

 

 

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5 minutes ago, C. B. Zeller said:
16 minutes ago, austin3515 said:

I'd say yes because it is BETTER than sending it via email. 

What's the reasoning here? In this situation I think hard copy is worse because it results in more effort on the part of the participant to be able to access the disclosures.

It's better in the DOL's opinion.  Why would I say such a thing?  You can always send a notice on paper.  There are no hoops at all to jump through to be able to send a paper disclosure, no "Safe harbor rule on mailing paper".  You just mail the paper. That's it.  There are only hoops to jump through to send a disclosure electronically.  So if as part of the e-disclosure safe harbor I am "required" to send a disclosure electronically, if I voluntarily opt to send that disclosure on paper then I am going above and beyond the safe harbor. 

I should be more clear - that is the case I am making / the question I am asking is wouldn;t it be reasonable to conclude that mailing the NOIA on paper is consistent with the Safe Harbor?

Austin Powers, CPA, QPA, ERPA

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16 minutes ago, austin3515 said:

I'm only asking if it is reasonable to assume that mailing the NOIA on paper will qualify for the safe harbor.

Gotcha.  Thats an unequivocal NO.  

First, the safe harbor requires that it is sent electronically after the initial notice.

Second, for terminee's the safe harbor requires that you have a personal electronic address.  If you fail to request and receive one upon termination (unless the employee has already provided one), the terminee in NOT a covered individual, and the safe harbor does not apply.

Third, for reasons stated earlier in this thread, requiring the participant to do more work to accesss disclosures and miss out on the instant notification and on the go availability of the notice is a non starter.

35 minutes ago, austin3515 said:

All of these hoops and hurdles are to obtain the luxury of emailing something versus hard-copy.

Its not, but you can follow most of the steps and email the documents directly under the safe harbor.  The hoops and hurdles are to obtain the luxury of not needing participant consent to electronic communication/notification.

The biggest issue with your approach is that you want to take the electronic notice out of the equation, which is really the foundation the DOL crafted the rule on.  You can default to electronic disclosure because the participant has indicated that they are willing to communicate directly by giving you an electronic address.  You have to monitor this electronic address, and if notifications bounce back or become deliverable, you can no longer assume that the participant is willing or able to access communications electronically, and can therefore not rely on the safe harbor.

DOL may be ok with your method (without participant consent, I highly doubt it) , but it does not get the reliance of safe harbor.

 

 

 

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33 minutes ago, austin3515 said:

It's better in the DOL's opinion.  Why would I say such a thing?  You can always send a notice on paper.  There are no hoops at all to jump through to be able to send a paper disclosure, no "Safe harbor rule on mailing paper".  You just mail the paper. That's it.  There are only hoops to jump through to send a disclosure electronically.  So if as part of the e-disclosure safe harbor I am "required" to send a disclosure electronically, if I voluntarily opt to send that disclosure on paper then I am going above and beyond the safe harbor. 

I should be more clear - that is the case I am making / the question I am asking is wouldn;t it be reasonable to conclude that mailing the NOIA on paper is consistent with the Safe Harbor?

You are mixing apples and oranges.

Your have an obligation to provide the participant with certain documents.  You can always provide the documents on paper by mailing them. The DOL is giving you three outs to provide them electronically with a safe harbor.

1.  Get participant consent to electronic delivery

2. Default to electronic delivery.  The website delivers the communication.  delivering the NOIA is just one of the requirements.  You do not have an option of sending the NOIA on paper if the actual document has to be accessed electronically. 

3. Default to electronic delivery of the communication itself.

If you cant/wont do one of the three, you dont get the safe harbor.

 

 

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6 minutes ago, RatherBeGolfing said:

You do not have an option of sending the NOIA on paper if the actual document has to be accessed electronically. 

Listen, I think this at least something worth confirming with the DOL.  Without this intepretation, there is no relief at all with respect to terminated participants.  We're not getting their emails.  It just isn;t happening. Not for anyone.  I think its worth asking the DOL at some Q&A.

Austin Powers, CPA, QPA, ERPA

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About what would have been the agency’s best or better interpretation of ERISA, people might (and, in comments on the proposed rule, did) disagree.

 

The final rule is clear that a notice of internet availability cannot be on paper.  To be codified 29 C.F.R. § 2520.104b-31(d)(4)(i) (“A notice of internet availability must: Be furnished electronically[.]”), 85 Federal Register 31884, 31923 (May 27, 2020).

 

The preamble states the Assistant Secretary’s reasoning: “The Department did not, however, adopt certain commenters’ suggestion that plan administrators should be able to furnish the [notice of internet availability] in paper form.  One of the goals in adopting this safe harbor is to advance the use of electronic tools to enhance the effectiveness of, and reduce the costs associated with, ERISA disclosures.  The Department maintains that it is important for covered individuals to receive an initial notice, on paper, alerting them that disclosures will be furnished using different procedures.  But after that, the safe harbor will create consistency by requiring plan administrators to communicate electronically.  As to ensuring the receipt of notices, the rule includes a specific provision in paragraph (f)(4) requiring that action be taken in response to invalid or inoperable electronic addresses.  Accordingly, paragraph (d)(4)(i) of the final rule adopts the proposal’s requirement that an NOIA must be furnished electronically to the address referred to in paragraph (b) of the safe harbor.”  85 Federal Register 31884, 31894 (May 27, 2020).

 

The new rule’s preamble, on its first page, describes the 2002 and 2020 safe-harbor rules as not the “exclusive means” of furnishing something.  A plan’s administrator might defend other methods as “measures reasonably calculated to ensure actual receipt of the material by plan participants, beneficiaries and other specified individuals.”  29 C.F.R. § 2520.104b-1(b)(1).

Peter Gulia PC

Fiduciary Guidance Counsel

Philadelphia, Pennsylvania

215-732-1552

Peter@FiduciaryGuidanceCounsel.com

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Now were talking.  They actually said "no paper."

So that was stupid.  This rule is completely worthless.

RBG, I know youre going to say "I said that already" but until Peter posted the preamble I thought it could be suggested/argued or whatever that paper was above and beyond.  I did not know until his post that they specifically said you cannot use paper for the NOIA.  I thought you were inferring paper would not qualify.  It doesn't matter I guess. 

Thanks!

Austin Powers, CPA, QPA, ERPA

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  • david rigby changed the title to New DOL Safe Harbor w/r/t Participant Communication
On 5/29/2020 at 10:52 AM, RatherBeGolfing said:

FWIW, I have been involved in the back and forth with DOL on this issue for many years, and it has taken a lot to get them to move this far.  

After all this, I just can't wrap my head around the DOL actually writing this down: "You cannot mail a hard-copy of this notice."  That is a breathtaking statement based on their past aversion to e-delivery.  Mind you there is not a requirement that a "hyperlink" be provided, and how could you since a login will inevitably be required.  But I guess this is over now.

Austin Powers, CPA, QPA, ERPA

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