The Environmental Paper Network supports the efforts of the United States Department of Labor to modernize the delivery of retirement plan information and the final rule: Default Electronic Disclosure by Employee Pension Benefit Plans Under the Employee Retirement Income Security Act. The adoption of the rule will benefit retirees, save billions of dollars, achieve environmental benefits and continue to preserve access to paper for those that prefer or require it.
The U.S. Department of Labor recently announced the publication of these finalized changes which expand the ability of private sector employers to communicate retirement plan information online or by email. The rule allows employers to deliver disclosures to plan participants primarily electronically, which will reduce printing, mailing, and related plan costs by an estimated $3.2 billion (USD) over the next decade. The rule will also make disclosures more readily accessible and useful for participants, but preserve the rights of those who want or need paper disclosures.
Based on the data regarding near universal access to the internet for participants, creating a regulated framework for retirement plan administrators to be able to communicate information online or by email is common sense. A 2018 study concluded that 93 percent of households owning defined contribution accounts had access to, and used, the internet in 2016. Reflecting this modern internet technology, the proposal offers a new, voluntary safe harbor for employers who want to make retirement plan disclosures accessible on a website, rather than sending volumes of paper documents through the mail. Plan participants will be notified that information is available online, including, instructions for how to access the information, and the right to paper copies of information.
The final rule protects people who prefer paper or lack access to the internet.
- A plan administrator may not default a participant into electronic delivery unless the participant has an electronic address.
- A plan administrator may not default a participant into electronic delivery without first notifying the participant by paper that some or all retirement documents will be furnished electronically to the electronic address, of the right to request and receive paper copies or to opt out of electronic delivery altogether, and of the procedures for exercising such rights.
- Each notice of internet availability must remind the participant of his right to request and receive paper, of the right to opt out of electronic delivery altogether, and the procedures to exercise such rights.
- A plan administrator must ensure that the system for furnishing the notice of internet availability is designed to alert the administrator of an invalid or inoperable electronic address. In the event an administrator is alerted to an invalid address, the administrator must treat the individual as opting out of electronic delivery if the problem is not promptly cured.
- When a worker leaves his or her job, the plan administrator must take steps to ensure the continued accuracy of the electronic address on file.
When purchasing paper and mailing statements that have been requested, all parties should at minimum follow the post-consumer recycled content baselines designated in US EPA’s Comprehensive Procurement Guidelines for Federal Purchasing. Further guidance on identifying leadership environmental paper products can be found in the Environmental Paper Network’s Paper Steps and the Canopy EcoPaper Database.
The Environmental Paper Network encourages retirement plan administrators to use these cost savings to benefit retirees, to pursue socially and environmentally responsible initiatives and to further reduce their own environmental footprint and paper use efficiency.