Delivering ERISA Disclosure for Defined Contribution Plans : Why the Time Has Come to Prefer Electronic Delivery

This White Paper systematically examines the choice between paper and electronic delivery of required information and notices to participants in insurance plans and more generally. The paper was written in response to a Request for Information by the U.S. Department of Labor concerning delivery to participants under the Employee Retirement Security Act of 1974 (ERISA). Due to technological changes and widespread current access to the Internet, the paper argues that the time has come for a major shift toward greater reliance on electronic delivery of required information. Specifically, ERISA defined contribution plans should have the flexibility to choose electronic delivery as the default, while retaining the right of individual participants to receive information or notices in paper if they prefer. Factually, there are large and growing advantages of electronic over paper delivery: (1) Access to electronic delivery is widespread and of better quality than paper delivery. Electronic disclosure enables access anywhere, anytime, with the device of the user’s choosing, and with a better filing system than paper notices. It improves access for the visually impaired, others with disabilities, and those who prefer to read a notice in a language other than English. Smartphones are speeding the convergence of access for different demographic groups. (2) Electronic delivery provides improved notice as requested by federal agencies – layered and just-in-time. (3) Electronic notice provides a range of improved functions, including integration with a large and growing array of software and aps for management of a family’s financial information. (4) Electronic delivery provides direct savings, due to low marginal cost of delivering notices, and with less environmental waste. (5 ) There are important cybersecurity advantages compared to risks from paper notices. For instance, bouncebacks on email are more effective than paper change-of-address forms and authentication is more sophisticated online. Relevant law supports a major shift toward electronic delivery. ERISA itself calls for “reasonably accessible” notice whether in paper, electronic, or other form, and accessibility on numerous dimensions has improved and will improve online. The E-SIGN Act of 2000, which has sometimes been used as a basis for caution in electronic delivery, actually was designed to encourage online activity. In addition, President Obama’s Executive Order 13563 supports a major shift toward electronic disclosure, for multiple reasons including its focus on recognizing the effects of changing technology