Newsletter

Can a Plan Summary be Made Available to Participants Via an Intranet Website?

Posted on October 5, 2015

In a recent Federal court case the judge held a plan administrator did not satisfy Department of Labor (DOL) regulations for electronic delivery of a Summary Plan Description (SPD) pertaining to a life insurance plan. (The same electronic delivery rules apply to the furnishing of most ERISA retirement plan documents.) Therefore the court held the SPD was deemed not to be furnished to the participant.

In a recent Federal court case the judge held a plan administrator did not satisfy Department of Labor (DOL) regulations for electronic delivery of a Summary Plan Description (SPD) pertaining to a life insurance plan. (The same electronic delivery rules apply to the furnishing of most ERISA retirement plan documents.) Therefore the court held the SPD was deemed not to be furnished to the participant.

The DOL regulations that govern electronic disclosure of plan documents are complex. A safe harbor allows documents to be furnished electronically or posted on the intranet without the participant consent if the participant has the ability to effectively access documents furnished in electronic form at a location where the participant is reasonably expected to perform his duties, and is expected to have access to the employer’s electronic information as an integral part of those duties. It is not enough that they have access somewhere at work or have access at a common location (like a break room).  Accessing the computer has to be an integral part of their job function.

In addition, the safe harbor applies only if the participant is provided notice (electronically or in paper form) that the document is available, the significance of the document (if not otherwise evident from the transmittal), and the right to receive the document in paper form.

In this case there was no evidence of the participant’s duties, whether access to the employer’s computer system was an integral part of those duties, or whether notice of the availability of the SPD, its significance or the right to receive a paper copy was provided.

Documents can still be sent to participants without work-related access to a computer as long as additional requirements are met. The employer or plan administrator must first obtain a consent form signed by the employee or beneficiary that specifically states the following:

• The names or types of documents to which the consent applies
• A sentence stating that consent can be withdrawn at any time without charge
• An email address where the employee will be able to receive future announcements and/or documents if sent by email
• The procedures for updating the email address used for receipt of electronically furnished documents
• The procedures for withdrawing consent
• The right to request and obtain a printed version of an electronically furnished document and, if there is a charge for the printed document, how much it will cost.
• The computer hardware or software needed to access and download the electronically delivered documents.
• If the plan administrator changes the hardware or software requirements, it must provide a new notice and obtain a new consent.

This case should serve as a reminder that the technical requirements of the electronic delivery regulations are substantive requirements that must be satisfied in order for the document to be deemed to have been furnished. Even if documents are provided electronically, notifications must be sent either in electronic or paper form to each participant at the time a document is provided electronically explaining the significance of the document and that the participant has the right to request a paper copy. POSTING ON THE INTRANET IS BY ITSELF INSUFFICIENT.

There are proposals to loosen the electronic delivery requirements, but until the rules are changed, you must follow the current rules. Contact us if you have any questions.

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