A new report from the U.S. Government Accountability Office (GAO) recommends that the Labor and Treasury Departments collaborate on default electronic delivery rules for pension-related disclosures. The Nov. 5 report also recommends that the agencies consider requiring plan sponsors to:
• allow participants to opt out of electronic delivery; and
• send periodic paper notices to participants to remind them about their right to change delivery methods.
The report, “Revised Electronic Disclosure Rules Could Clarify Use and Better Protect Participant Choice,” notes confusion among plan sponsors over the default electronic disclosure rules. It also cites U.S. Census data from 2010 on the prevalence of Internet access in the United States, emphasizing that in 2010, “only about half of the country had Internet access at home and about a quarter had Internet access at work,” with access correlated to age, income, education, race and ethnicity.
While GAO’s report acknowledges reduced costs as a “major impetus” for electronic disclosure, in addition to built-in tracking, improved participant access to the most up-to-date information and increased participant choice of media, ultimately the GAO still determined that confusion about requirements and disparity in Internet access necessitate reconsidering the shift away from paper.
Responding to the report’s findings, Brian Graff, executive director and CEO of ASPPA and NAPA, said, “GAO appears to be promoting delivery of hard copy 401(k) plan disclosures by suggesting new regulations to make it easier for participants to opt out of electronic disclosures by plan sponsors. Ironically — and telling — the GAO report was delivered to us by electronic means.”
Ray Harmon, Esq., is ASPPA’s Government Affairs Counsel.
