Section 161 Guidelines for Disclosure of Employee Benefit Plan Information

• Library: Specialized Business Entities 2009 Forms

Through Electronic Media

On April 9, 2002, the Department of Labor ("DOL") issued final regulations relating to electronic communication and recordkeeping by Employee Retirement Income Security Act of 1974 ("ERISA"), Pub. L. No. 93-406, 88 Stat. 829, pension and welfare plans. The new regulations, which became effective October 9, 2002, are great news for employers and now permit virtually all types of documents under ERISA Title I to be distributed electronically. In addition, the Internal Revenue Service ("IRS") published final rules regarding electronic disclosure of certain information. These rules set forth the documents that can be transmitted electronically and have provisions similar to the DOL's rules.

The DOL's final regulations provide for a "safe harbor" approach, which essentially means that, although employer plan sponsors are not required to follow such regulations, to the extent that they do, the electronically distributed documents will be deemed to have been distributed in accordance with ERISA.

The universe of individuals to whom ERISA documents can be distributed is limited to (1) plan participants who have the ability to effectively access documents furnished in electronic form and who are expected to regularly review their electronic communication from their employer and (2) individuals who affirmatively consent to receiving ERISA documents through electronic means. Under these new regulations, for example, communications to plan participants who routinely perform services for their employer from their homes or from an out-of-the-office location will still be able to fit within the safe harbor. In addition, administrators using electronic forms of document distribution must take "appropriate and necessary" measures reasonably calculated to ensure that participants actually receive the transmitted information and that the electronic delivery system protects the confidentiality of any personal information. Examples of methods that may ensure that a participant receives the intended information include using return-receipt or notice of undelivered mail features and conducting periodic reviews or surveys.

Included among the many types of documents that can be distributed under the final regulations are the following:

· Summary Plan Descriptions

· Summary of Material Modifications

· Summary Annual Reports

· COBRA Notices

· Qualified Medical Child Support Order Notices

· Qualified Domestic Relations Orders

· Pension Plan Statements

· HIPAA...