On September 13, 2011, the Department of Labor (DOL) issued Technical Release 2011-03, which provides interim guidance on the electronic disclosure of fee and expense information by participant-directed individual account retirement plans under ERISA Reg. § 2550.404a-5 (the “participant fee disclosure regulation”).

Background

When DOL published the participant fee disclosure regulation in October 2010, it reserved the provisions of the rule governing the manner in which the required fee information must be disclosed, stating only that its existing electronic disclosure safe harbor rule (Reg. § 2520.104b-1(c)) could be utilized pending review of public feedback it subsequently solicited on that safe harbor. DOL continues to review the public comments it has received and has not yet published any updated electronic disclosure guidance.

* The safe harbor regulation for electronic disclosure, published in 1997 and revised in 2002, takes a conservative approach, distinguishing between: (1) participants who have effective computer access to the plan sponsor’s electronic information system as part of their work function; and (2) all other participants, beneficiaries and alternate payees, who must affirmatively consent to electronic delivery after receiving a specified notice. The safe harbor also obliges the plan administrator to take appropriate and necessary measures reasonably calculated to ensure actual receipt of the disclosures and protection of confidential information, and to maintain an alternative paper delivery system for recipients who request that form of disclosure.