DOL Affirms No Negative Impact of E-Delivery Rule

The Biden administration has thrown its support behind the conclusions—and safeguards—of the previous administration’s e-delivery rule.

“Our preliminary assessment is that the subject regulation is unlikely to have any negative impact on the populations identified in the explanatory statement because of the regulation’s specific safeguards against such impacts,” a new report by the DOL’s Employee Benefits Security Administration (EBSA) concludes. The report was drafted in response to language in the Consolidated Appropriations Act of 2021 (courtesy of Sen. Roy Blunt, R-MO) that requested a report on the impact of the rule “on individuals residing in rural and remote areas, seniors, and other populations that either lack access to web-based communications or who may only have access through public means.” Those concerns had been raised by critics of the regulation.

‘Guard’ Rails

The assessment notes that the regulation “only permits electronic delivery by default to individuals that actually have internet access—that is, an employee must have either provided the employer with an email address or a web-based mobile number, or been assigned an electronic address by the employer for business reasons other than receiving ERISA disclosures.” 

The report acknowledges two additional safeguards in the regulation:

• if an employee’s email address or web-based mobile number becomes invalid or inoperable, the plan administrator can no longer rely on the regulation to send disclosures to that person electronically (unless the problem is fixed); and 
• the regulation retained the “critical condition” that individuals who prefer to receive disclosures on paper can request paper copies of disclosures and opt out of electronic delivery entirely at any time, free of charge.

Beyond that, the report cites a number of surveys and reports[1] backing its assessment (including one by Peter Swire and DeBrae Kennedy-Mayo, funded by the American Retirement Association and the Investment Company Institute), concluding that, “although the Department does not collect data on internet access as part of its ordinary oversight activities, the Department does monitor trends in internet access as new data become available from other sources.”

Beyond that, the analysis notes that the Labor Department believes that it would be “premature and uninformative” to try and conduct an assessment of the impact of the subject safe harbor regulation at the present time, since that impact could not be isolated “from other[2] temporary sub-regulatory guidance that separately allows plan administrators to use different electronic methodologies to furnish required ERISA disclosures.”