Summary Annual Report - electronically?

[Guest Jennyb473]

we are trying to figure out the best way to get the SAR to the participants in the plans we work on. We offer a participant (and plan sponsor) website and offer an option of electronic only statements. Some opt for that, some don't. We send out quarterly participant statements (PPA with all vesting, disclosures, etc on them) to those wanting paper copies and post all on the websites so those opting for electronic only also can view. We have always mailed annual statements along with the SAR out to participants but it just confuses them to receive a 12/31 statement almost a year later when they have already received quarterly statements giving the same information. I would like to stop mailing the annual statements and just make them available on the participant website, but then how do I get the SAR out to the participants? Can I post that on the website as well and not mail anything out? How do we know for sure that everyone will 1) go online to view 2) have access to get online to view? Can we just assume yes at this point or do we really need to mail them out?

Along a similar line, we have a client that wants to force electronic only statements on their participants - they have sent a letter to each participant saying they will only be available online starting with the 9/30/11 quarter end, can they do that or do we have to send them out to those that have not actually opted for electronic only?

thanks!

[Guest jims]

Mailing the annual statement so late seems like a bad idea due to the confusion. It would have been better to mail the annual statement and SAR separately when they were available. As for the SAR, my understanding is you can post it to the website as long as you notify those people that have consented to electronic delivery that a new document(SAR) is available. Presumably, you will be notifying those people by email telling them to go to the website. Further, for those emails that you determined were not received (e.g. bounced for for bad email address), you will need to mail hardcopy SAR. You would then use that event to deem the participant canceled future electronic delivery until they consented again by giving you a valid email address.

Since it is unlikely you will have 100% electronic consent, you probably already have a process for mailing required notices. For hardcopy delivery, its OK that you mailed it but don't know if received. But for electronic delivery, you must follow through to confirm with reasonable assurance it was actually received. Ignoring a bounced email would not satisfy this standard.

For people that consented to online, if you successfully notify them of a new document on the website, you can't control if they look at it or not. But you have fulfilled your duty. The only people you can assume have access to a computer are those workers that access a computer as part of their regular workday activity. But it is best to first get consent for electronic delivery.

While electronic delivery is nice, lots of people oversimplify and therefore are not in compliance.