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News January 16, 2012 Issue

DOL Says "Continuous Delivery" Sites and Other Electronic Means May Be Used to Meet Participant-Level Disclosure Obligations

Back in the fall, the Department of Labor issued Technical Release 2011-03 (TR 2011-03), an interim enforcement policy regarding the use of electronic media to satisfy the participant-level disclosure requirements of ERISA Rule 404a-5.

After TR 2011-03 was released, the Employee Benefits Security Administration (EBSA) was barraged with questions about whether, and under what circumstances certain e-delivery methods would be acceptable. On December 8, EBSA answered those questions when it reissued the release in a revised and restated form as Technical Release 2011-03R. DOL emphasized that "the revised technical release is identical to TR 2011-03 except as necessary to clarify [several e-delivery] issues."

Specifically, TR 2011-03R confirms that continuous access websites meet the good faith compliance requirement to furnish disclosures using "measures reasonably calculated to ensure actual receipt of the material." The revised release also clarifies that investment-related information such as comparative chart information required to be disclosed under the rule may be furnished as part of or along with the participantís pension benefit statement received via electronic delivery.

A number of conditions apply to both types of electronic delivery.

In the release, DOL said it was asked to extend its guidance provided in 2006 in Field Assistance Bulletin (FAB) 2006-03 to TR 2011-03. FAB 2006-03, among other things, states that furnishing pension benefit statement information in electronic form pursuant to the Rule 104b-1(c) electronic delivery safe harbor will constitute good faith compliance with the Rule 105 pension benefit statement provisions.

DOL declined to extend that guidance to Rule 404a-5 at present, citing continuing differences of opinion on the effectiveness of electronic delivery. DOL solicited comment on this topic back in April, and is currently reviewing the approximately 80 comments to determine whether, and possibly how, it would modify the electronic disclosure safe harbor in the future.

At least for now, TR 2011-03R is DOLís final word on these specific electronic delivery issues until that time.