Keep Me Posted (KMP) has received feedback from consumers that they have recently either stopped receiving mailings from their retirement plans or that they have suddenly started getting emails saying that important documents must now be accessed online.
Several months ago, KMP informed consumers that the U.S. Department of Labor (DOL) issued new rules that would allow employee benefit plan administrators to unilaterally revoke established paper communications preferences. Specifically, the trusted custodians of retirement savings plans can now switch from mailing important notices to individual plan stakeholders on paper, and send electronic communications instead. All plan administrators are required to do to put this new rule into effect is to mail a single notice alerting consumers of the change, along with steps to take to reclaim the legal right to paper (for more, see https://keepmepostedna.org/new-dol-rule-disadvantages-many-americans-by-making-electronic-delivery-the-default-for-retirement-and-pension-plan-information/).
What is happening?
If an employer, in conjunction with their workplace benefits plan administrator (for example, Fidelity Investments or Transamerica Retirement Solutions) decides to implement a new electronic “notice-and-access” disclosure system as the default as is now allowed by the DOL, employees could ultimately stop receiving important mailings about their retirement plans and begin getting emails directing them to access important documents online. Most companies and plan administrators did not immediately force employees and retirees into this disruptive paperless scheme, but this is changing quickly in 2021. As many as 137 million participants in 700,000 different company retirement plans could be impacted by this new regulation.
But there is good news: Anyone whose communications preferences have been changed still have a right to paper and can reclaim it.
Is making electronic communications the default legal?
In all likelihood, yes, if both the employer and benefits administrator agreed to make paperless communication the default. However, the plan administrator is legally required to physically mail an “initial notification” before altering paper communications preferences of individual plan holders. This notice must clearly alert consumers that the longstanding practice of receiving important plan documents and disclosures on paper by mail will be changing to digital methods, and this notice must include the consumer email address they intend to use for delivery. This one-time legal document must also plainly inform plan holders of their right to paper for any and all plan documents, and that they can opt out of electronic delivery entirely. The administrator must also provide simple instructions for doing so, including a toll-free telephone number, website address to log into and/or a physical mailing address to send letters for reclaiming paper preferences.
KMP has reviewed samples of initial notifications sent by major plan administrators, and has concluded that the average consumer is not being well informed that a change to their critical communications preferences is forthcoming, nor are they being provided a clear understanding of their legal right to paper. As a result, we are working with our public interest advocacy partners to engage plan administrators on the DOL’s requirements, asking them to clearly notify of changes and rights in the initial notification, and to take corrective actions.
Are the emails from plan administrators legitimate?
KMP suggests caution and diligence before opening any unsolicited electronic correspond from unfamiliar email addresses. If an employer and plan administrator have implemented a new electronic notice-and-access disclosure system and an initial notification about the change to paperless is received in the mail, legitimate emails will be sent to the email address indicated in that one-time paper notice. Also, it’s important to understand that the burden falls on the consumer to guard against cyber criminals who could use this new rule as yet another pretext in phishing, ransom and malware emails, and countless other digital exploits that are increasingly common.
What can I do?
The DOL rule establishes a right to paper for employer plan holders, which includes the ability to request paper copies of specific documents as well as the right to opt out of electronic delivery entirely at any time, free of charge. The most secure method to reclaim paper options is to follow any instructions provided in the initial notification received in the mail, and to use the specific toll-free number to call, website address to log into and/or the physical mailing address to send letters as directed in that document. Plan holders who never received or cannot find the initial notification should ask their company’s benefits administrator to provide the appropriate contacts and procedures.
KMP is closely monitoring the implementation and consumer impacts of this DOL rule. We welcome all feedback on challenges and successes consumers have reclaiming their Right to Paper.