Electronic

In many cases notices, forms and other plan related communications can be provided to participants, beneficiaries and newly eligible employees in an electronic format (e-mail, Internet, CD-ROM or other electronic media format) either at the workplace or outside the workplace. Significant delivery efficiencies, cost savings, and service improvements can be achieved for the plan sponsor and the plan participants when electronic delivery methods can be employed.

At The Workplace

The DOL has set forth requirements that would provide a Safe Harbor for the disclosure obligations under Title I of ERISA utilizing electronic delivery at the workplace The main DOL requirements for Safe Harbor delivery at the workplace are listed below, but the guiding principle is "the plan administrator shall use measures reasonably calculated to ensure actual receipt of the material by plan participants, beneficiaries and other specified individuals" (DOL regulation, Part 2520 Amended, paragraph 2520.104b-1(b)).

1. The electronic delivery method must be devised to reasonably ensure the actual receipt of the transmitted information (i.e., use of return-receipt or notice of non-delivery electronic mail features; periodic reviews or surveys to confirm receipt).
2. The electronic delivery must protect the confidentiality of the personal information relating to the individual's accounts and benefits by including measures that prevent unauthorized receipt or access.
3. The electronically delivered information is both complete as to the content prescribed and consistent with the format and style requirements for the particular document/notice/form.

At the time a document is furnished electronically the recipient must receive notice (either electronic or non-electronic) of the significance of the information provided (unless it is reasonably evident from the communication itself) and must be informed of the right to request and receive a paper version.

The Safe Harbor for electronic delivery in the workplace only applies to individuals who have the ability to effectively access documents in electronic form at any location they are reasonably expected to perform their duties as an employee and who have access to the employer's or plan sponsor's electronic information system as an integral part of their duties.

In short, availability of a kiosk will not satisfy the requirement.

Putting information on a CD is the least stringent method of electronic communication, particularly for expansive information like prospectuses. With appropriate disclaimer attached to the CD notifying the participant of the ability to request paper copies (among other things), distribution by this method qualifies for the Safe Harbor .

Outside the workplace

The Safe Harbor is more difficult to secure

The DOL safe harbor extends to electronic delivery outside of the workplace, but the requirements are more extensive, possibly precluding this method as a general means of distributions. Specifically the following apply:

1. An individual must provide affirmative consent (either electronically or non-electronically) to receive documents electronically and must not subsequently have withdrawn such consent.
2. When documents are to be provided via the Internet or some other electronic communication network, the individual must affirmatively consent (electronic or non-electronic) in a manner that reasonably demonstrates the individual has the ability to access the information in the electronic form it will be provided and has provided an address for receipt of electronically delivered documents.
3. Prior to providing the affirmative consent above the individual must receive a clear and conspicuous statement the delineates the type of documents covered under the consent, that the consent can be withdrawn at any time without charge, the specific procedures for withdrawing consent or for updating the individual's address for receipt of electronically delivered documents, the technical (hardware, software) requirements for receiving and saving the documents delivered, and the right to request paper copies of documents (and the charge, if any).

Should the technical requirements for access or retention ever change, the individual must be notified of the specific changes, be given the opportunity to withdraw consent without consequence, and must affirmatively re-consent.

The guiding principle for delivery outside the workplace is that the plan sponsor must secure evidence of consent that reasonably affirms the individual can actually receive delivery effectively.