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How New DOL Guidance Could Impact Your Disclosure Process
The Department of Labor’s new proposed regulations significantly change how retirement plans may rely on the rule that allows only one paper participant statement per year. While the original rule seemed simple, the proposed regulation adds layers of conditions and documentation.
Old Requirements
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Topic
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Old Requirement (Prior Rules)
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Paper Statement Frequency
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Plans could provide one paper statement per year for defined contribution plans if the other quarterly statements were delivered electronically.
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Default Electronic Delivery
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Allowed under the 2020 e-delivery safe harbor (notice-and-access or direct email).
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Participant Consent
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No explicit requirement for participant opt-in or confirmation beyond standard e-delivery rules.
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Website Posting Requirements
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Statements had to be posted online if using notice-and-access, but no timing requirement tied to the paper-statement exception.
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Notification Requirements
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Standard notice-of-availability rules applied.
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Tracking & Documentation
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No special tracking required beyond normal disclosure rules.
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Applicability to Plan Types
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Applied to defined contribution plans only.
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Failure Consequences
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Noncompliance could lead to disclosure violations but was rarely enforced.
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Rationale
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Intended to reduce paper and administrative burden.
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New Requirements
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Topic
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New Requirments (Proposed Rules)
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Paper Statement Frequency
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Still allows one paper statement per year, but only if strict new conditions are met.
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Default Electronic Delivery
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Still allowed but additional participant protections required before relying on one-paper-per-year rule.
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Participant Consent
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Plans must ensure participants have continuous electronic access and participants must not have opted out of e-delivery.
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Website Posting Requirements
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Statements must be posted online within 45 days of the end of the quarter for which the paper statement is not provided.
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Notification Requirements
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Plans must send a specific notice informing participants that only one paper statement will be provided per year and explaining how to request additional paper copies.
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Tracking & Documentation
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Plans must maintain records proving compliance, including posting dates, delivery confirmations and participant access.
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Applicability to Plan Types
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Still applies to DC plans, but the DOL clarifies narrower applicability and excludes certain plan types and situations.
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Failure Consequences
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Noncompliance may result in fiduciary breach exposure as the DOL emphasizes participant rights and access.
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Rationale
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Focused on participant protection, ensuring electronic access is meaningful and reliable.
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The Bottom Line
While the new proposed rules do not eliminate the one-paper-statement option, it does make it much harder to use. Plans must prove participants have real-time electronic access to quarterly statements. The added participant protections may make compliance more complex than expected. The DOL is clearly signaling that paper is still important for many participants and the new rule may require changes to systems and processes. If you have any questions or concerns, please contact your RMS Account Executive or Leisha Gosling at (502) 719-0581.
