What Plan Documents May Be Distributed via Electronic Media

The rules governing distribution via electronic media cover materials (including reports, statements, notices and other documents) that are required under Title I of ERISA, or regulations issued thereunder, to be furnished either by direct operation of law or on individual request.  Among other documents, this includes, but is not limited to, SPDs, SARs, and SMMs, and benefit statements.

Who May Receive Plan Documents via Electronic Media

There are two categories of individuals to whom disclosure of plan documents may be made through electronic media – those with a certain level of access to electronic information and those who consent to receipt through electronic media. 

1. A Participant at his or her Place of Employment

A participant may receive plan documents electronically if he or she has the ability to effectively access documents furnished in electronic form at a location where he or she is reasonably expected to perform duties as an employee.  Such participant must access the employer’s electronic information system as an integral part of those duties.  29 C.F.R. § 2520.104b-1(c)(2)(i).

2. A Participant, Beneficiary or Other Person Entitled to Documents who Consents to Receipt

A participant, beneficiary or any other person entitled to documents may receive plan documents electronically if he or she has affirmatively consented, in electronic or non-electronic form, to receiving documents through electronic media and has not withdrawn such consent.  29 C.F.R. § 2520.104b-1(c)(2)(ii).

If the documents are to be furnished through the Internet or other electronic communication network, the consent must be given electronically, in a manner that reasonably demonstrates the individual’s ability to access information in the electronic form that will be used for distribution of the plan documents.  The recipient must provide an electronic address for the receipt of the plan documents. 

Prior to consenting, the recipient must be provided with a clear and conspicuous statement in electronic or non-electronic form, which indicates:

• The types of documents to which the consent would apply;
• That consent can be withdrawn at any time without charge;
• The procedures for withdrawing consent and for updating the address for electronic receipt;
• The right to request and obtain a paper version of an electronically furnished document, including whether the paper version will be provided free of charge; and
• Any hardware and software requirements for accessing and retaining the plan documents.

Following consent, if a change in hardware or software requirements needed to access or retain the electronic plan documents creates a material risk that the recipient will be unable to access or retain such documents, he or she must again consent to receipt by electronic media.  Prior to giving this consent, the recipient must be provided with a statement of the revised hardware or software requirements for access to and retention of the electronic plan documents.  He or she must also be advised of the right to withdraw consent without charge and without the imposition of any condition or consequence that was not disclosed at the time of the initial consent. 

Other Requirements for Electronic Distribution of Plan Documents

There are a number of other requirements for electronic distribution.  First, the administrator must take appropriate and necessary measures reasonably calculated to ensure that the system results in actual receipt of transmitted information.  This may be accomplished through the use of a return receipt feature, a notice of undelivered e-mail feature or by conducting periodic reviews or surveys to confirm receipt of the transmitted documents.  29 C.F.R. § 2520.104b-1(c)(1)(i).

The administrator must also take appropriate and necessary measures reasonably calculated to ensure that the system protects the confidentiality of the personal information relating to the recipient’s accounts and benefits.  This may be accomplished by incorporating into the system measures designed to preclude unauthorized receipt of or access to such information by individuals other than the intended recipient. 

In addition, the electronically delivered documents must be prepared and furnished in a manner consistent with the style, format, and content requirements otherwise applicable to that disclosure document.  29 C.F.R. § 2520.104b-1(c)(1)(ii).  The preamble to the regulations notes that the content, style and format requirements applicable to disclosures under the Act does not preclude the use of interactive technologies, multimedia components or hyperlinks to related materials in electronic disclosures.  However, if the significance of the document is not reasonably evident as transmitted, notice of such significance must be provided to each participant or beneficiary at the time of transmission.  29 C.F.R. § 2520.104b-1(c)(1)(iii).  Typically, this is accomplished by a brief statement in a cover e-mail explaining what the document is and that it reflects important benefits information.  The notification requirement, above, is designed to ensure that participants who, for example, receive a disclosure document either as an attachment to an electronically transmitted message, or in the form of a message and hyperlink to a plan Internet site, will be put on notice that the communication contains important plan information.

Finally, the participant or beneficiary must be furnished with a paper version of the document upon request and free of charge.  Notice of this right should be given at the time of electronic transmission.  29 C.F.R. § 2520.104b-1(c)(1)(iii)-(iv).