The Employee Benefits Security Administration (EBSA) issued Technical Release 2011-03, which sets out an interim policy allowing administrators of participant-directed defined contribution ERISA plans to furnish required information regarding plan fees and expenses electronically under the final participant disclosure regulations (see Practice Note, Fee and Investment Disclosure Requirements for Participant-Directed Plans).

When the final participant disclosure regulations were published in October 2010, EBSA did not specify whether and how these disclosures can be made to participants electronically. Instead, EBSA reserved that provision for future deliberations in light of broader issues raised by electronic disclosures under Title I of ERISA. EBSA is currently reviewing public comments on the matter.

In light of the upcoming effective date of the regulations, which require disclosures to be made to participants in calendar-year plans by May 31, 2012, EBSA recognized that some form of interim relief is necessary. Technical Release 2011-03 provides that EBSA will not take enforcement action based solely on a plan administrator's use of electronic media to make the required disclosures as long as the administrator complies with certain conditions.

The rules differ depending on whether or not the required disclosures are permitted to be included in quarterly pension benefit statements, such as plan-related and administrative expense information (see Practice Note, Fee and Investment Disclosure Requirements for Participant-Directed Plans: Changes to Participant Disclosure Requirements and Quarterly Disclosures). A plan administrator may furnish disclosures that are permitted to be included in pension benefit statements in the same manner as the other information included in the statement. These rules permit the use of a secure continuous access website and participants are not required to affirmatively consent to receive the disclosures electronically.

Required participant fee and expense disclosures that are not permitted to be included in pension benefit statements, such as investment-related information, can only be furnished electronically either by complying with EBSA's existing safe harbor rule for electronic disclosures generally or by complying with an interim procedure set out in the guidance (see Practice Note, Fee and Investment Disclosure Requirements for Participant-Directed Plans: Annual Disclosures: Investment-related Information).

Under EBSA's existing safe harbor, plan administrators must receive a participant's affirmative consent to receive disclosures electronically if the individual does not have reasonable access to a computer in their workplace. Alternatively, EBSA authorized a modified interim procedure in the guidance that requires plan administrators to send participants an initial notice and an annual notice that satisfy certain requirements. The administrator must:

There is a special transition provision for the first initial disclosures required under the regulations applicable to plans that have e-mail addresses of participants already on file. This provision permits a plan administrator that has an e-mail address on file for a participant to use it for electronic disclosures (without requiring the participant to voluntarily provide the address again) if an initial notice, containing most of the information described above, is furnished to the participant between 90 and 30 days before the date the first disclosures are required under the regulations (May 31, 2012 for calendar-year plans). Under this provision, the plan administrator may send this initial notice electronically, but only if there is evidence of electronic interaction between the plan and the participant within the last 12 months.

For a comprehensive analysis of the requirements for plan administrators set out in the EBSA's participant disclosure regulations, see Practice Note, Disclosure Requirements for Participant Directed Contribution Plans.