Should an employer assign an email address for every employee (even those who won’t use it in one’s daily work)?

[Peter Gulia]

Another BenefitsLink discussion includes some observations about how much or how little help the new Default Electronic Disclosure rule offers if an employer/administrator lacks email addresses for the portion of participants who are severed from employment.

 

A 2002 rule allows electronic delivery if, with other conditions, the employee/participant can access the communications using an email system the employee uses as “an integral part” of the employee’s work for the employer.

 

Under Wednesday’s new rule, there is no such “integral part” condition and an employer-provided electronic address can be enough to invoke the new regime if the employer assigns the address for some employment-related purpose beyond the retirement plan’s communications.

 

A retirement plan’s administrator may continue to rely on such an address (if there is no bounce-back or other operability defect) after a participant’s severance from employment.

 

If an employer/administrator seeks to grow the population of (future) former employees who can remain in the new electronic regime, should an employer assign an email address for every employee?  (Imagine an employer tells its employees that human-resources and safety announcements will be sent to employees’ employer-provided email addresses.)

 

What do BenefitsLink people think about whether that way is practical or impractical?

[shERPA]

It might be a good idea, but of course the terminated employees would need to have continued access to that email account.  SOP is typically to shut off access immediately upon termination.  Employers probably don't want company-wide communications unrelated to plan disclosure going to terminees.   Maybe the workaround is to have a plan specific subdomain and set up an email account for terminees there.   So John Smith terminates, his john.smith@acme.com is shut down and he is assigned john.smith@401k.acme.com where he still has access.

[MoJo]

Part of the preamble indicates that an employer can NOT provide an email address solely for the purpose of receiving plan information.  Would not giving those who don't regularly use email as part of their job mean, almost by definition, that this practice is doing just what the DOL said in not appropriate?

[Peter Gulia]

Thanks.

What about keeping the email address constant, but managing which blast distribution lists and system privileges the address is included in?

[RatherBeGolfing]

Just now, MoJo said:

Part of the preamble indicates that an employer can NOT provide an email address solely for the purpose of receiving plan information.  Would not giving those who don't regularly use email as part of their job mean, almost by definition, that this practice is doing just what the DOL said in not appropriate?

Yes.  Its a no go.

[Peter Gulia]

Mojo and RatherBeGolfing, I’m imagining that an employer uses the email addresses for something that fits the new rule’s call for an employment-related purpose other than communicating about the retirement plan.

 

Here’s an example I suggested in the other discussion: Imagine an employer tells its employees that human-resources and safety announcements will be sent to employees’ employer-provided email addresses.

 

Do you think that’s enough?

[CuseFan]

I'm with Mojo and RBG, and once an employee is terminated, for what purpose other than plan communications would such e-mail be relevant? 

[RatherBeGolfing]

Peter, I think thats enough.   The compromise from the proposed rule's provision that you could assign an email just for disclosures is that you can use an employer assigned email as long as it has at least some other purpose.  As long as it fills some other function as well, you are ok.

It is not enough if applied to @shERPA separate server for terminees example though, which requires a private electronic address.

[MoJo]

2 minutes ago, RatherBeGolfing said:

Peter, I think thats enough.   The compromise from the proposed rule's provision that you could assign an email just for disclosures is that you can use an employer assigned email as long as it has at least some other purpose.  As long as it fills some other function as well, you are ok.

It is not enough if applied to @shERPA separate server for terminees example though, which requires a private electronic address.

I think you need to be cautious here.  The DOL is looking for "effective" notice - and cautions that the reason a separately assigned "plan" email doesn't work is because it is seldom used, subject to forgotten passwords, and isn't effective for the purpose of notice under the rules.  Even if you couple it with a few other things, the fiduciaries have to ascertain that such other purposes for the email are sufficient to be sufficiently used to overcome the potential problems the DOL cites.  Frankly, the HR and/or safety notices may not be enough unless one is REQUIRED to read them, they come out frequently enough that employees would be "in" the email often enough to make sure the plan notices are "effectively delivered."

[RatherBeGolfing]

15 minutes ago, MoJo said:

I think you need to be cautious here.  The DOL is looking for "effective" notice - and cautions that the reason a separately assigned "plan" email doesn't work is because it is seldom used, subject to forgotten passwords, and isn't effective for the purpose of notice under the rules.  Even if you couple it with a few other things, the fiduciaries have to ascertain that such other purposes for the email are sufficient to be sufficiently used to overcome the potential problems the DOL cites.  Frankly, the HR and/or safety notices may not be enough unless one is REQUIRED to read them, they come out frequently enough that employees would be "in" the email often enough to make sure the plan notices are "effectively delivered."

I agree, but I think that if you require an email for some form of HR or safety notice that is regularly occurring and not just ad hoc, you should be ok.  It is an area where you need to be careful though. I have some clients where this simply would not fly because most of the participants do not understand computers, internet, and email well enough. 

[MoJo]

Just now, RatherBeGolfing said:

I agree, but I think that if you require an email for some form of HR or safety notice that is regularly occurring and not just ad hoc, you should be ok.  It is an area where you need to be careful though. I have some clients where this simply would not fly because most of the participants do not understand computers, internet, and email well enough. 

Agreed - keep in mind determining "effective" is a fiduciary function.  Always wise to be careful when being a "fiduciary."

[RatherBeGolfing]

1 minute ago, MoJo said:

Agreed - keep in mind determining "effective" is a fiduciary function.  Always wise to be careful when being a "fiduciary."

The preamble touches on it without going into detail on page 31889

Quote

Other commenters, however, raised objections to the proposal’s recognition of the validity of employer-assigned electronic addresses. These commenters were particularly concerned about the language in the proposal that permitted an employer-assigned address to be created solely for purposes of using the proposed safe harbor. These commenters were concerned that ineffective disclosure will result if employers, or service providers or thirdparty technology firms hired by employers, create and assign electronic addresses with unclear or unfamiliar URL components solely to comply with the new safe harbor. In these circumstances, such attenuated or ambiguous electronic addresses (e.g., email accounts) may be unfamiliar to, ignored, overlooked, or forgotten by covered individuals. One commenter asserted that an employer-assigned electronic address for purposes of this rule could, in some jurisdictions, constitute a breach of fiduciary duty.

 

[Peter Gulia]

There’s at least a reasoned argument that the new rule allows continuation of an employer-provided electronic address that previously met the condition for some employment-related purpose beyond retirement plans’ communications.

 

(We understand the idea that someone might ignore, overlook, or forget an unrequested address.  But the rule’s condition that the address be provided by the employer, not the administrator or a service provider, and have some employment-related purpose beyond retirement plans’ communications is what the Labor department explains as overcoming that objection.  I think we all concur that whether there really is another employment-related purpose is facts-and-circumstances, and that an employer might require its employees’ not-too-infrequent check-in.)

 

The new rule includes this: “Special rule for severance from employment.  At the time a covered individual who is an employee, and for whom an electronic address assigned by an employer pursuant to paragraph (b) of this section is used to furnish covered documents, severs from employment with the employer, the administrator must take measures reasonably calculated to ensure the continued accuracy and availability of such electronic address or to obtain a new electronic address that enables receipt of covered documents following the individual's severance from employment.”  29 C.F.R. § 2520.104b-31(h) (GPO e-CFR as of May 27, 2020).

 

That text applies for an employer-provided address, but not for an address the participant provided.  See Federal Register pages 31902-31903.

 

A widely recognized interpretation principle prefers an interpretation that does not result in any portion of a text duplicating another portion or having no consequence.

 

If lacking an employment-related purpose beyond retirement plans’ communications would by itself make an employer-provided address no longer valid for a former employee, what purpose would the quoted text serve?

 

And remember, this is a safe-harbor rule, and one made following notice-and-comment procedures.  At least until the Supreme Court overrules or reinterprets Chevron, a court must defer to the Labor department’s interpretation about what’s enough for an administrator to be treated as having “furnished” a communication.

 

(We recognize that whether a fiduciary met ERISA § 404(a) duties, including communications duties, is a separate point.)

[ReallyChill]

It'll be interesting to see whether the Supreme Court's decision in Thole, which denied Article III standing to plaintiffs who did not allege individual economic harm, will reduce the fiduciary risk inherent in "effective" in this and similar rules. Courts may now require plaintiffs (and the DoL!) to show that they were economically harmed by a failure to show that the employer breached its fiduciary duty by not ensuring "effective" communication to press claims.

[Belgarath]

Ah, so that they suffer "informational injury" or some such drivel?