New Safe Harbor for Electronic Communication

New options for the use of on-line disclosure

On May 15 the Department of Labor finalized new “safe harbor” rules for the use of electronic media to provide documents required under ERISA.

These new rules represent a potentially important easing of the efforts needed for plan administrators to meet disclosure obligations under ERISA. However, a more careful review of the rules raises significant questions about whether the new rules will live up to their potential.


Under ERISA, plan administrators are required to “furnish” certain documents to plan participants (including both active participants and terminated employees with a right to future benefits) and beneficiaries. The documents include summary plan descriptions, summaries of material modification, benefit statements, and summary annual reports. A full list of disclosures required by ERISA can be found here.

DOL regulations issued in the pre-internet era (but still in effect) require that administrators must use “measures reasonably calculated to ensure actual receipt” of these documents. For example, in-hand delivery is acceptable–but merely leaving documents in a location frequented by participants is not adequate. This pre-internet framework did not accommodate the growth of electronic communication and did not provide guidance on what measures would be “reasonably calculated to ensure actual receipt” of electronic communication. Recognizing these shortcomings and the growth of electronic media, in 2002 the DOL issued a “safe harbor” rule for administrators to use electronic communication to provide required disclosures.

Under the 2002 safe harbor rule, an administrator could rely on electronic media (i) for employees who had access to electronic media at his/her workplace and with respect to whom the electronic system was “an integral part” of the employee’s job duties, or (ii) any other participant or beneficiary who affirmatively consented to the use of electronic media. The DOL estimates that 56 percent of disclosures are already delivered electronically using the 2002 safe harbor.

With the increased use of electronic communication since 2002, the DOL has issued this new safe harbor intended to expand the availability of electronic communication to meet ERISA disclosure requirements. The DOL was also prompted to act by a 2018 Executive Order directing the DOL to explore the broader use of electronic communication “as a way to improve the effectiveness of disclosures and to reduce their associated costs and burdens.”

There are a few key points to note before delving into the new safe harbor:

    •      The new safe harbor in an alternative method for complying with ERISA’s disclosure requirements-it does not replace either the pre-internet regulations or the 2002 safe harbor. In effect, administrators have three different ways to comply with ERISA’s disclosure requirements: rely on the pre-internet regulations, use the 2002 safe harbor, or use the new safe harbor.

    •      The 2002 safe harbor is available for all disclosure required under ERISA–both for retirement and for health & welfare plans. However, the new safe harbor applies only to documents that are provided with respect to retirement plans (such as 401(k) and 403(b) plans)–and the new safe harbor does not extend to health & welfare plans. This represents a major shortcoming in the new safe harbor–administrators looking to truly reduce the burden of paper disclosures for all benefit plans will need to continue using the prior rules. The DOL acknowledged the desirability of expanding electronic delivery for health & welfare plans, but determined that expansion of the new safe harbor to health & welfare plans requires additional analysis and input and chose to issue the retirement-centric safe harbor now while exploring the expansion of electronic delivery to health & welfare plans.

    •      Administrators do not have to rely on either the 2002 safe harbor or the new safe harbor in order to use electronic media. An administrator could structure the use of electronic media in a way that relied on the pre-internet general regulations. However, because of the lack of clarity in the pre-internet regulations, administrators typically seek the comfort of a safe harbor as the basis for using electronic media for ERISA disclosure-but such reliance on the safe harbors is not required.

    •      Compliance with disclosure requirements under ERISA is not the same as compliance with disclosure requirements under the Internal Revenue Code and many retirement plan disclosures are required by the Internal Revenue Code and governed by rules issued by the IRS –and are not covered by the DOL rules. Examples of Code-based disclosures include notices to employees regarding plan distributions and rollovers, automatic contribution arrangements, and qualified domestic relations orders. However, the IRS has issued its own regulations, effective since 2007, permitting the use of electronic media. The IRS regulations remain in place and continue to control how electronic media can be used for Code-based disclosures. These 2007 IRS regulations can be found here and a full list of the Code-based disclosures can be found here.

The New Safe Harbor

The new safe harbor allows plan administrators to default any participant or beneficiary into electronic disclosure–unless the participant or beneficiary affirmatively elects to receive a paper copy. Indeed, this may be the most significant difference between the new safe harbor and the 2002 safe harbor (which primarily requires an opt-in for electronic communication).

Under the new safe harbor, a plan administrator can use electronic communication to meet certain disclosure obligations under ERISA if:

    •      The individual provides the employer or plan administrator with an electronic address (email address or smartphone number) or the employer provides the electronic address to employees. An employer can require an employee provide an electronic address as a condition of employment.

    •      The administrator furnishes to each individual an initial notification (on paper) that the administrator will use electronic delivery. This initial notification must be provided prior to the administrator’s reliance on the new safe harbor with respect to such individual. The safe harbor specifies the information that must be included on this initial notification (including the electronic address that will be used for the individual, any instructions necessary for the individual to access the covered documents, and information on the individual’s right to opt out of electronic delivery and obtain paper disclosures).

    •      The plan administrator then provides each covered individual with a “notice of internet availability” (“NOIA”) when documents become available electronically. The NOIA must be provided electronically to the individual’s email address identified in the initial paper notification described above. The new safe harbor includes detailed rules regarding the content and timing of the NOIA. The new safe harbor allows administrators to use a single NOIA for multiple documents–but only for the SPD and certain annual disclosures.

    The new safe harbor is scheduled to effective on July 26, 2020–so administrators can start using this new safe harbor almost immediately.

The new safe harbor (and the 100+ page preamble) contain many more details that will need to be considered for administrators that seek to utilize the new safe harbor. These include detailed rules regarding the content and timing of the NOIA, ensuring that email addresses remain valid, describing individuals’ right to receive paper documents, alternative rules that apply (in lieu of the NOIA) if documents are emailed directly to the individual, and requirements regarding retention of online documents.


The new safe harbor–by allowing administrators to use electronic disclosure as the default– represents a theoretical expansion of administrators’ ability to rely on electronic disclosure. However, until the principles of the new safe harbor are expanded to health & welfare plans and Code-based disclosures, administrators are likely to continue relying on prior guidance to maximize their use of electronic disclosure.