Default Electronic Disclosure by Employee Pension Benefit Plans Under ERISA

 
CONTENT
Federal Register, Volume 85 Issue 102 (Wednesday, May 27, 2020)
[Federal Register Volume 85, Number 102 (Wednesday, May 27, 2020)]
[Rules and Regulations]
[Pages 31884-31924]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2020-10951]
[[Page 31883]]
Vol. 85
Wednesday,
No. 102
May 27, 2020
Part III
Department of Labor
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Employee Benefits Security Administration
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29 CFR Parts 2520 and 2560
Default Electronic Disclosure by Employee Pension Benefit Plans Under
ERISA; Final Rule
Federal Register / Vol. 85, No. 102 / Wednesday, May 27, 2020 / Rules
and Regulations
[[Page 31884]]
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DEPARTMENT OF LABOR
Employee Benefits Security Administration
29 CFR Parts 2520 and 2560
RIN 1210-AB90
Default Electronic Disclosure by Employee Pension Benefit Plans
Under ERISA
AGENCY: Employee Benefits Security Administration, Department of Labor.
ACTION: Final rule.
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SUMMARY: The Department of Labor is adopting in this document a new,
additional safe harbor for employee benefit plan administrators to use
electronic media, as a default, to furnish information to participants
and beneficiaries of plans subject to the Employee Retirement Income
Security Act of 1974 (ERISA). The rule allows plan administrators who
satisfy specified conditions to provide participants and beneficiaries
with a notice that certain disclosures will be made available on a
website, or to furnish disclosures via email. Individuals who prefer to
receive disclosures on paper can request paper copies of disclosures
and opt out of electronic delivery entirely. The Department expects the
rule to enhance the effectiveness of ERISA disclosures and
significantly reduce the costs and burden associated with furnishing
many of the recurring and most costly disclosures. In addition to
benefiting workers, this rule will immediately assist employers and the
retirement plan industry as they face a number of economic challenges
due to the COVID-19 emergency, including logistical and other
impediments to compliance with ERISA's disclosure requirements.
DATES:
 Effective date: The final rule is effective on July 27, 2020.
 Applicability date: The final rule is applicable on July 27, 2020.
FOR FURTHER INFORMATION CONTACT: Rebecca Davis or Kristen Zarenko,
Office of Regulations and Interpretations, Employee Benefits Security
Administration, (202) 693-8500. This is not a toll-free number.
SUPPLEMENTARY INFORMATION:
A. Background
(1) Original Delivery Standards for ERISA Disclosures
 The Employee Retirement Income Security Act of 1974 (ERISA) and
regulations thereunder provide general standards for the delivery of
all information required to be furnished to participants,
beneficiaries, and other individuals under Title I of ERISA.\1\ Plan
administrators must use delivery methods reasonably calculated to
ensure actual receipt of information by participants, beneficiaries,
and other individuals.\2\ For example, in-hand delivery to an employee
at his or her workplace is acceptable, as is material sent by first
class mail. In response to developing internet, email, and similar
technologies, the Department of Labor (Department) first amended
ERISA's delivery standards in 2002 by establishing a safe harbor for
the use of electronic media to furnish disclosures (the 2002 safe
harbor).\3\ The 2002 safe harbor was not and is not the exclusive means
by which a plan administrator may use electronic media to satisfy the
general standard. However, plan administrators who satisfy the
conditions of a safe harbor are assured that the general delivery
requirements have been satisfied.
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 \1\ See 29 CFR 2520.104b-1.
 \2\ See 29 CFR 2520.104b-1(b)(1).
 \3\ See 29 CFR 2520.104b-1(c).
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 The 2002 safe harbor, which is set forth in paragraph (c) of Sec.
2520.104b-1, applies only to two categories of participants and
beneficiaries: First, employees who are ``wired at work''--those with
the ability to effectively access electronic disclosures at any
location where they are reasonably expected to perform their employment
duties and for whom access to the employer's electronic information
system is an integral part of those duties; and second, individuals
entitled to documents under Title I of ERISA who do not fit into the
first category, but who affirmatively consent to receive documents
electronically. The 2002 safe harbor also specifies additional
requirements that must be satisfied in order to furnish ERISA
disclosures electronically. The preamble to the Department's proposal
of this regulation included a comprehensive summary of the 2002 safe
harbor's requirements.\4\ As explained in detail below, the new,
additional safe harbor adopted today does not supersede the 2002 safe
harbor; the 2002 safe harbor remains in place as another option for
plan administrators.
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 \4\ 84 FR 56894, 56895 (Oct. 23, 2019).
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 In addition to the 2002 safe harbor, the Department occasionally
has issued interpretive guidance allowing different electronic delivery
methods in limited circumstances. For example, Field Assistance
Bulletin 2006-03 (FAB 2006-03) allows plan administrators who meet
specified criteria to provide continuous website access to pension
benefits statement information required by ERISA section 105.\5\
Similarly, Field Assistance Bulletin 2008-03 (FAB 2008-03), which
provides supplementary interpretive guidance on the Department's
qualified default investment alternative (QDIA) regulation,\6\ allows
plan administrators who want to send required QDIA notices
electronically to rely on either the Department's 2002 safe harbor or
the regulations issued by the Department of the Treasury (Treasury
Department) and the Internal Revenue Service (IRS) at 26 CFR 1.401(a)-
21 relating to use of electronic media.\7\ The impact of this final
rule on these Field Assistance Bulletins and other interpretive
guidance is discussed below, in the section titled ``Transition
Issues.''
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 \5\ Field Assistance Bulletin No. 2006-03 (Dec. 20, 2006).
 \6\ See generally 29 CFR 2550.404c-5.
 \7\ See Field Assistance Bulletin No. 2008-03, (Q&A7), quoting
72 FR 60458 (Oct. 24, 2007).
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(2) Regulatory Background
 The Department is issuing a final rule today following an extensive
and thorough evaluation not only of the public record for this
regulatory initiative, but also of other agencies' disclosure rules;
economic and policy research concerning electronic disclosure; and
information submitted by, and recommendations of, a variety of
stakeholders. This evaluation has been ongoing, as electronic
disclosures and modes of delivery have developed over time and as the
Department over the years has released additional disclosure
requirements and interpretive guidance following issuance of the 2002
safe harbor. The Department consistently receives feedback about
compliance with the 2002 safe harbor and suggestions for how the safe
harbor could be improved, sometimes in response to other regulatory
projects, sometimes in response to ERISA Advisory Council proceedings,
and otherwise. A first formal step, however, was the Department's 2011
publication of a Request for Information (RFI) Regarding Electronic
Disclosure \8\ in response to Executive Order 13563, ``Improving
Regulation and Regulatory Review,'' issued on January 18, 2011.\9\ The
RFI asked 30 questions soliciting views, suggestions, and comments from
employee benefit plan stakeholders, their representatives, and the
general public on whether and how to expand
[[Page 31885]]
or modify the 2002 safe harbor. The Department carefully evaluated
responses to this RFI to better understand the benefits, challenges,
and costs of electronic delivery and other disclosure-related
issues.\10\
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 \8\ 76 FR 19286 (Apr. 7, 2011).
 \9\ See 76 FR 3821 (Jan. 21, 2011). The Executive Order stresses
the importance of achieving regulatory goals through the most
innovative and least burdensome tools available.
 \10\ The Department received approximately 78 comments on the
2011 RFI, which are available at https://www.dol.gov/agencies/ebsa/laws-and-regulations/rules-and-regulations/public-comments/1210-AB50.
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 Since publication of the 2011 RFI, the Department has analyzed
whether there are more effective ways to regulate the disclosure and
delivery of information to ERISA plan participants and beneficiaries.
Stakeholders routinely ask the Department to recognize ongoing changes
in technology, as some other federal agencies have done, and to take
advantage of those changes by updating and modernizing ERISA's
electronic delivery standards in the 2002 safe harbor. The Department
has had numerous discussions with staff of other federal government
agencies after reviewing their guidance and standards for electronic
delivery of required information, including the Treasury Department,
IRS, and the Securities and Exchange Commission (SEC). The preamble to
the Department's proposed regulation discussed at length the
Department's review of these agencies' guidance, all of which informed
the Department in publishing the proposed rule, as did standards and
practices of the Social Security Administration, the Comptroller of the
Currency, and the Federal Thrift Savings Plan (TSP).\11\ Commenters
agreed that it is important for the Department to continue coordinating
with other agencies, especially the Treasury Department, IRS, and
SEC.\12\ Plan administrators and service providers may have to comply
with other federal and state requirements in administering their plans,
and commenters therefore encouraged as much coordination as possible to
limit the regulatory burden that may result from inconsistent
standards.
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 \11\ 84 FR 56894, at 56897 et seq.
 \12\ One commenter recommended that the Department coordinate
with the Federal Communications Commission (FCC) to ensure that the
use of smartphones to comply with this rule will not conflict with
FCC guidance. The FCC was included as part of the Executive Order
12866 review process and raised no objection to the requirements of
this final rule.
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 The Department also met with stakeholders and reviewed recent
studies and policy and economic analyses concerning disclosure
practices, as well as changes in internet access and usage across
different populations. Entities such as the ERISA Advisory Council \13\
and the U.S. Government Accountability Office \14\ also have made
recommendations to the Department concerning possible changes to
ERISA's electronic delivery rules to improve participants' disclosure
experience and reduce administrative burdens. And the Department
continues to closely monitor Congressional interest in expanding the
use of electronic media for ERISA disclosures.\15\
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 \13\ See, e.g., Mandated Disclosure for Retirement Plans--
Enhancing Effectiveness for Participants and Sponsors, ERISA
Advisory Council (Nov. 2017); 2009 ERISA Advisory Council Report on
Promoting Retirement Literacy and Security by Streamlining
Disclosures, at https://www.dol.gov/agencies/ebsa/about-ebsa/about-us/erisa-advisory-council/2009-promoting-retirement-literacy-and-security-by-streamlining-disclosures-to-participants-and-beneficiaries; 2007 ERISA Advisory Council Working Group Report on
Participant Benefit Statements, at https://www.dol.gov/agencies/ebsa/about-ebsa/about-us/erisa-advisory-council/2007-participant-benefit-statements; and 2006 ERISA Advisory Council Report Working
Group on Prudent Investment Process, at https://www.dol.gov/agencies/ebsa/about-ebsa/about-us/erisa-advisory-council/2006-prudent-investment-process.
 \14\ See GAO-14-92, Private Pensions: Clarity of Required
Reports and Disclosures Could Be Improved, p. 40, GAO (Nov. 2013),
https://www.gao.gov/assets/660/659211.pdf.
 \15\ For example, the Setting Every Community Up for Retirement
Enhancement Act of 2019, enacted December 20, 2019, Public Law 116-
94 (``SECURE Act''), reflects Congressional interest in expanding
electronic delivery of ERISA disclosures and other information.
Specifically, section 101(c) of the SECURE Act, which amended
section 3 of ERISA, requires the terms of a pooled employer plan to
provide that certain disclosures and other information may be
provided in electronic form. See also Joint Committee on Taxation,
Technical Explanation of H.R. 4, the ``Pension Protection Act of
2006,'' as Passed by the House on July 28, 2006, and as considered
by the Senate on Aug. 3, 2006 (JCX-38-06), Aug. 3, 2006 (regulations
relating to the furnishing of pension benefit statements, ``could
permit current benefit statements to be provided on a continuous
basis through a secure plan website for a participant or beneficiary
who has access to the website''); Secretary of Labor's 2018
Testimony before the Senate Appropriations Subcommittees on Labor,
Health and Human Services, Education, Review of the FY 2019 Dept. of
Labor Budget Request, Senate, 115th Cong. (April 12, 2018), https://www.appropriations.senate.gov/hearings/review-of-the-fy2019-dept-of-labor-budget-request; and 2017 and 2018 legislative activity
concerning the Receiving Electronic Statements to Improve Retiree
Earnings Act (RETIRE) Act, at H.R. 4610 (Dec. 11, 2017) and S. 3795
(Dec. 19, 2018).
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 A final important development, prior to the Department's issuance
of the proposed regulation in October 2019, was the President's
issuance of Executive Order 13847 on August 31, 2018.\16\ In relevant
part, the Order instructed the Department, in consultation with the
Treasury Department, to review whether regulatory or other actions
could be taken to improve the effectiveness of required disclosures and
ease the costs and regulatory burdens given the number and complexity
of ERISA notices. In compliance with the Order, the Department worked
with Treasury Department staff throughout the regulatory process and,
within the required one-year period, completed a review of actions that
could be taken ``to make retirement plan disclosures required under
ERISA and the Internal Revenue Code of 1986 more understandable and
useful for participants and beneficiaries, while also reducing the
costs and burdens they impose on employers and other plan fiduciaries
responsible for their production and distribution.'' \17\ The Order
directed that the Department consider proposing appropriate regulations
or other guidance, if a determination is made that action should be
taken. The Department's proposed regulation, issued October 23, 2019
and finalized herein, directly responds to the mandate set forth in
Executive Order 13847.\18\
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 \16\ E.O. 13847, Strengthening Retirement Security in America,
83 FR 45321 (Sept. 6, 2018).
 \17\ Id.
 \18\ A few commenters suggested that the proposed regulation
inadequately responded to the Executive Order 13847, because the
proposal focused on delivery, as opposed to other methods of
improving the effectiveness of disclosures. The Department does not
agree with these commenters. At the outset, the Executive Order does
not require the Department to issue any proposed or final rule, but
only to review policies and, if warranted, ``consider proposing
appropriate regulations or guidance.'' Id. section 2(c). The
Executive Order also does not create any enforceable rights against
the Department. See id. section 3(c). Regardless, the Department is
confident that the new safe harbor substantially responds to both
prongs of the Executive Order. As discussed in the Regulatory Impact
Analysis section of this document, a notice-and-access framework
will significantly reduce plan costs. Further, a notice-and-access
framework also facilitates, among other things, interactivity, just-
in-time notifications, layered or nested information, word and
number searching, engagement monitoring, anytime or anywhere access,
and potentially improved visuals, tutorials, assistive technology
for those with disabilities, and translation software, even though
this rule does not mandate such practices. These features may be
used to improve participants' and beneficiaries' disclosure
experiences. Further, the RFI (published with the proposed rule)
solicited information, data, and ideas on additional measures
(beyond the electronic delivery safe harbor in 29 CFR 2520.104b-31)
that the Department could take in the future (either as part of
finalizing the proposal in this document, or a separate regulatory
or appropriate guidance initiative) to improve the effectiveness of
ERISA disclosures, especially with respect to design and content of
ERISA disclosures.
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 In the preamble to the proposal, the Department described in detail
the standard of the Treasury Department and the IRS for notices using
electronic media, which was issued in 2006 at 26 CFR 1.401(a)-21.\19\
Affected parties, including the ERISA Advisory Council, had previously
encouraged the
[[Page 31886]]
Department to allow plan administrators to rely on this standard, which
they generally interpret as more flexible than the Department's 2002
safe harbor, when furnishing ERISA disclosures.\20\ The Department has,
in limited circumstances and pursuant to temporary guidance, allowed
plan administrators to rely on the Treasury Department's electronic
media regulation for applicable notices at 26 CFR 1.401(a)-21(c) as an
alternative to reliance on the 2002 safe harbor.\21\ In light of
Executive Order 13847 requiring consultation with the Treasury
Department, the preamble to the proposal explained that the
Department's new proposed safe harbor was intended to align with the
Treasury Department's electronic media regulation. The Department
invited interested parties to share their views on whether this
objective is desirable and what other steps might be needed to achieve
it. Commenters consistently took the position that it was unclear
whether an ``intention to align'' meant that a plan administrator's use
of the notice-and-access framework in the proposal for Code disclosures
would satisfy the applicable Treasury Department electronic media
regulations. Commenters encouraged the Department to obtain
confirmation of this position from the Treasury Department to eliminate
any uncertainty.\22\ The Department provided these comments to the
Treasury Department for its consideration. The Treasury Department and
the IRS have indicated that they intend to issue additional guidance
relating to the use of electronic delivery for participant notices.
This final rule is considered to be an Executive Order 13771
deregulatory action. Details on the estimated cost savings of this
final rule can be found in the Regulatory Impact Analysis, below.
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 \19\ 84 FR 56894 at 56897, 56898.
 \20\ For example, in comments submitted to the ERISA Advisory
Council in 2017, the Department was encouraged to adopt the Treasury
Department's approach. See Groom Law Group, statement to the ERISA
Advisory Council, June 7, 2017, p. 4, available at https://www.dol.gov/sites/dolgov/files/EBSA/about-ebsa/about-us/erisa-advisory-council/2017-mandated-disclosure-for-retirement-plans-levine-and-winters-written-statement-06-07.pdf.
 \21\ See, e.g., Field Assistance Bulletin No. 2006-03 (Dec. 20,
2006), providing for ``the furnishing of pension benefit statements
in accordance with the provisions of [26 CFR ] 1.401(a)-21, as good
faith compliance with the requirement to furnish pension benefit
statements to participants and beneficiaries'' under ERISA.
 \22\ A few commenters suggested that the Treasury Department
also should explicitly adopt a notice-and-access framework. The
Department provided these comments to the Treasury Department for
its consideration.
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(3) Purpose of Regulatory Action
 The Department's principal objective in finalizing this rule is to
carefully update, based on a comprehensive public record, ERISA's
electronic delivery rules for required disclosures to better leverage
ongoing improvements in online and mobile-based technology and
communications and to provide a structure that will be appealing to,
and workable for, today's workers. In doing so, the Department believes
the framework of this final rule strikes an appropriate balance between
competing policy goals--on the one hand taking advantage of the
innovations and reduced costs that may be achieved through enhanced use
of electronic communication, and on the other hand ensuring suitable
safeguards for participants and beneficiaries who may be less ready to
move to electronic communication (or who simply prefer paper).
 The final rule reflects the Department's reliance on a wide variety
of sources of evidence concerning individuals' access to, and use of,
electronic media in the United States:
 A 2019 survey found that 90 percent of U.S. adults use the
internet, representing a substantial increase from 2000 when 52 percent
of U.S. adults reported using the internet.\23\
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 \23\ Monica Anderson, Andrew Perrin, et al, 10% of Americans
don't use the internet. Who are they?, Pew Research Center (Apr. 22,
2019). Available at https://www.pewresearch.org/fact-tank/2019/04/22/some-americans-dont-use-the-internet-who-are-they/.
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 A 2017 survey by the U.S. Census Bureau estimated that 87
percent of the U.S. population lives in a home with a broadband
internet subscription.\24\
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 \24\ ``Types of internet Subscriptions by Selected
Characteristics,'' U.S. Census Bureau American Community Survey 1-
Year Estimates (Table S2802) (2017).
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 A 2019 survey found that among non-broadband users, 45
percent cite their smartphone as a reason for not subscribing to high-
speed internet service at home.\25\
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 \25\ See Monica Anderson, Mobile Technology and Home Broadband
2019, Pew Research Center (June 13, 2019), https://www.pewresearch.org/internet/wp-content/uploads/sites/9/2019/06/PI_2019.06.13_Mobile-Technology-and-Home-Broadband_FINAL2.pdf.
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 A 2018 study concluded that 93 percent of households
owning defined contribution accounts had access to, and used, the
internet in 2016.\26\
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 \26\ Peter Swire and DeBrae Kennedy-May, ``Delivering ERISA
Disclosure for Defined Contribution Plans: Why the Time has Come to
Prefer Electronic Delivery--2018 Update,'' (April 2018), p. 19., See
Also ICI Research Perspective, ``Ownership of Mutual Funds,
Shareholder Sentiment, and Use of the internet, 2018'' (November
2018), finding among households with defined contribution plans, 92%
had access to the internet in 2016 and 93% had access in 2018.
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 A 2015 survey of retirement plan participants' online
habits indicated that 99 percent reported having internet access at
home or work, and 88 percent of respondents reported accessing the
internet on a daily basis.\27\
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 \27\ 2015 Telephone Survey Conducted by Greenwald & Associates
for the SPARK Institute. Improving Outcomes with Electronic Delivery
of Retirement Plan Documents, Quantria Strategies, (June 2015),
https://www.sparkinstitute.org/content-files/improving_outcomes_with_electronic_delivery_of_retirement_plan_documents.pdf.
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 A 2015 report observed that smartphones are used for much
more than calling, texting, or basic internet browsing. Based on
surveys, the report notes that 62 percent of smartphone owners have
used their smartphones in the past year to look up information about a
health condition; 57 percent, to do online banking; 44 percent, to look
up real estate listings; 43 percent, to look up information about a
job; 40 percent, to look up government services or information; 30
percent, to take a class or find education content; and 18 percent, to
submit a job application.\28\
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 \28\ Aaron Smith, Smartphone Use in 2015, Pew Research Center,
(April 1, 2015), https://www.pewresearch.org/internet/2015/04/01/us-smartphone-use-in-2015/.
The Department believes that these trends have continued to the present
and will into the future, increasing the number of individuals for whom
electronic delivery of ERISA disclosures is appropriate or preferred.
(4) 2019 Proposed Regulation and Request for Information
 In October 2019, the Department published in the Federal Register a
proposed rule and RFI intended to expand the methods by which required
ERISA disclosures may be furnished electronically.\29\ The proposal
would allow plan administrators who satisfy certain conditions to
notify participants and beneficiaries that certain disclosures will be
made available on a website, while preserving the right of these
individuals to opt out of electronic delivery and to request paper
copies of disclosures. The Department invited interested persons to
submit comments on the proposed rule and RFI and, in response to this
invitation, the Department received 257 written comments from a variety
of parties, including plan sponsors and fiduciaries, plan service and
investment providers, and employee benefit plan and participant
representatives, as well as 210 submissions in response to a petition.
These comments are available for review on the ``Public Comments'' page
under the ``Laws and Regulations'' tab of the Department's Employee
[[Page 31887]]
Benefits Security Administration website.\30\ This Notice includes a
detailed discussion of the provisions of the final rule, the public
comments received by the Department, and how these comments impacted
the Department's decision-making when adopting the final rule.
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 \29\ 84 FR 56894 (Oct. 23, 2019).
 \30\ https://www.dol.gov/agencies/ebsa/laws-and-regulations/rules-and-regulations/public-comments/1210-AB90. A few commenters on
the proposal requested an extension, arguing that the 30-day comment
period for the proposed rule was unreasonable and insufficient to
adequately address the many complex issues presented by the
proposal. One commenter further requested that the Department hold a
hearing on the proposal prior to issuing final guidance. The
Department declined these requests, in part because so few
commenters raised the objections, and also because most issues
relevant to electronic disclosure have been analyzed and reviewed by
the Department and the public for many years, especially after the
2011 RFI and temporary guidance issued by the Department. A
substantial and comprehensive public record exists, supplemented and
updated with comments on the proposed rule. The Department disagrees
that a public hearing is necessary to supplement an already
comprehensive public record. The scope and depth of the public
record that has been developed belies arguments that a 30-day
comment period was insufficient.
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 The Department also issued the RFI on electronic disclosure based
on the Department's conclusion, at the time the proposed rule was
published, that further information from stakeholders is necessary
before proposing any substantive regulatory additions, deletions, or
changes to ERISA's disclosures themselves, as opposed to changes in the
means of delivery for such disclosures. The RFI, which was included in
the preamble to the proposed rule (as opposed to being a stand-alone
document), contained a series of questions to elicit views from all
interested parties on additional ways to improve the usefulness and
effectiveness of ERISA disclosures, for example with respect to the
design or content of disclosures. The Department is analyzing responses
to the RFI to determine whether regulatory or other action, in addition
to today's final rule on electronic delivery of disclosures, should be
taken to further enhance the effectiveness of ERISA's disclosures.\31\
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 \31\ Review of comments on the RFI also is responsive to
Executive Order 13847, which directed the Department to improve the
effectiveness of plan disclosures, in addition to exploring
reductions in employer costs and administrative burden, through
expanded use of electronic delivery. See generally E.O. 13847, 83 FR
45321 (Sept. 6, 2018).
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B. Final Rule--Alternative Method for Disclosure Through Electronic
Media
 The Department is amending part 2520 by adding a new section, Sec.
2520.104b-31, entitled ``Alternative method for disclosure through
electronic media.'' This section is a regulatory safe harbor that
provides a new, optional method for compliance with ERISA's general
standard for furnishing or delivering disclosures to participants and
beneficiaries. A number of commenters on the proposed rule asked about
the relationship between the new safe harbor and the existing 2002
electronic delivery safe harbor. Some commenters indicated satisfaction
with the existing safe harbor. The new safe harbor is an additional
method of delivery and does not substantively change the 2002 safe
harbor.\32\ Plan administrators, therefore, have additional flexibility
with the rule in selecting the electronic delivery method that works
best for the plan and its participants and beneficiaries. Plan
administrators who wish to continue to rely on the 2002 safe harbor for
electronic delivery, or to furnish paper documents by hand-delivery or
by mail, can continue doing so.
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 \32\ In response to comments, non-substantive conforming
amendments are being made to the 2002 safe harbor to facilitate the
new safe harbor. For example, in response to commenters' requests,
the Department is adding a cross reference to the new safe harbor in
paragraph (f) of Sec. 2520.104b-1 to improve regulatory clarity.
Similar conforming amendments were made to Sec. Sec. 2520.101-
3(b)(3) and 2560.503-1.
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 Most commenters on the rule, as a general matter, believe that the
new framework is a welcome addition to the 2002 safe harbor, which they
argue is difficult for them to satisfy with respect to many
participants and beneficiaries. In support of this position, these
commenters cited with approval the many prior recommendations of the
ERISA Advisory Council, the U.S. Government Accountability Office, and
other parties.\33\ These commenters also argue that electronic
disclosure is both feasible and preferred; that paper disclosure is
very costly; that participants' disclosure experiences can be improved
online; that data obtained online enables plans to improve disclosures;
that online activity may improve participants' savings rates and
retirement outcomes; that participants can access information online at
any time; and that web-based disclosures have the capacity to serve
diverse populations better than traditional paper disclosures.
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 \33\ These recommendations also are set forth in the preamble to
the proposed rule. See 84 FR 56899, 56900.
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 Commenters who object to the new safe harbor, on the whole, believe
that the 2002 safe harbor is sufficient on its own and is a preferable
rule because it retains paper delivery as the default.\34\ The
principal argument of these commenters against the proposal is that
some participants and beneficiaries lack reasonable access to the
internet and others simply prefer paper, and the proposed rule, if
finalized, would fail to adequately protect the interests of both
categories of individuals. The Department disagrees with this argument.
The statistics cited above, under the heading ``Purpose of Regulatory
Action,'' show nearly universal access to the internet among
individuals who participate in an ERISA covered plan. These statistics
also demonstrate significant and upward trends in both access to, and
usage of, the internet by individuals covered by ERISA plans, including
for banking, research, and other non-browsing functions. Despite these
statistics, however, the Department understands that some people prefer
paper documents for a variety of legitimate personal reasons, including
improved reading comprehension, distrust of electronic storage
solutions, computer illiteracy, difficulty navigating websites,
username and password fatigue or forgetfulness, and the cost of
computer hardware and establishing and maintaining access to the
internet or managing files electronically. The final rule, therefore,
honors the preference of these individuals by including several key
provisions to ensure that if covered individuals desire paper
documents, plans must accommodate these individuals with minimal
friction. The first, and perhaps most important, of these conditions in
the final rule is the provision that guarantees covered individuals a
right to request and receive paper copies of specific covered documents
or to globally opt out of electronic delivery altogether. This
provision alone addresses commenters' major concerns with a plan
administrator's decision to change the default mode of delivery from
paper to electronic media. Second, not only are plan administrators
prohibited from charging covered individuals a fee in connection with
their exercise of these rights, plan administrators also are prohibited
from having procedurally cumbersome or complex processes for exercising
these rights. Thus, a covered individual's decision to receive paper
disclosures must be respected and cannot be met with economic or
procedural hindrances. Finally, the final rule mandates that covered
individuals
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receive multiple reminders, on different mediums, of these rights.
Thus, a participant's initial decision against opting out of electronic
delivery is not permanent and can be revisited with each reminder or at
any time. Collectively these three provisions protect individuals'
preference for paper by guaranteeing a right to it and by barring plan
administrators from imposing unreasonable burdens on exercising this
right.
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 \34\ One of these commenters requested that, to prevent the
misuse of any cost savings attributable to this final rule, the
Department require plan administrators to document all savings
attributable to their reliance on this safe harbor and apply these
savings directly to participants' accounts or benefits. Such a
request is beyond the scope of this safe harbor and ERISA's
disclosure requirements, which are the subject of this rulemaking.
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 The final rule adopted today is fundamentally similar to the
proposed rule, although modifications were made to reflect a variety of
comments from affected parties. As in the proposal, the final rule
establishes a safe harbor for compliance with ERISA's general standard
for delivery of disclosures to participants and beneficiaries.\35\ The
general scope of the safe harbor relief is set forth in paragraph (a)
of the final rule. Paragraphs (b) through (k) of the final rule set
forth the detailed conditions to receiving the relief, and paragraph
(l) contains the effective and applicability date. The detailed
conditions are discussed below along with public comments on the
proposal. The safe harbor applies only to ``covered individuals'' and
only with respect to ``covered documents.'' Over 10 years, the new safe
harbor will save plans approximately $3.2 billion net, annualized to
$349 million per year (using a 3 percent discount rate).\36\
---------------------------------------------------------------------------
 \35\ Commenters have asked about the application of ERISA's
fiduciary standards and other statutory requirements to electronic
disclosure in varying contexts. This safe harbor addresses only a
plan administrator's compliance with ERISA's standard for the
furnishing of covered documents to covered individuals. It neither
addresses nor supplants more general fiduciary or other statutory
obligations under ERISA.
 \36\ See the Regulatory Impact Analysis in Section D of this
preamble for a fuller discussion of net cost savings.
---------------------------------------------------------------------------
(1) Covered Individual
 Paragraph (b) of the final safe harbor defines a ``covered
individual'' for purposes of the rule as a participant, beneficiary, or
other individual entitled to covered documents and who--when he or she
begins participating in the plan, as a condition of employment, or
otherwise--provides the ``employer, plan sponsor, or administrator (or
an appropriate designee of any of the foregoing)'' with an electronic
address. This includes an email address or internet-connected mobile-
computing-device (e.g., smartphone) number, and is intended to be broad
enough to encompass new and changing technology.
 The existence of an electronic address for notification to a
covered individual is critical to the effective implementation of a
notice-and-access framework, much like a mailing address is critical to
delivery of a paper document. The existence of a valid email address is
similarly essential for a plan administrator who will deliver ERISA
disclosures by complying with the requirements of new paragraph (k) of
this final rule, which allows plan administrators to send documents via
email. The final rule continues to require, as a condition of reliance
on the safe harbor, including the new paragraph (k), that a plan
administrator possess an electronic address that enables electronic
communication with a covered individual.
 The final rule offers plan administrators a variety of ways to
comply with the condition to obtain an electronic address for each
covered individual. This provision, for example, is satisfied if the
company provides plan participants an electronic address because of
their employment. This requirement also is satisfied if an employee
provides a personal electronic address to the plan administrator or
plan sponsor, for example, as part of the job application process or on
other human resource documents. In addition, a plan administrator or
service provider can request an electronic address in plan enrollment
paperwork or to establish a plan participant's online access to plan
documents and account information.
 A few commenters raised a pragmatic concern with the use of
electronic addresses that are phone numbers (as opposed to an email,
for instance). They asked what would happen if a notice of internet
availability (hereinafter ``NOIA'') inadvertently is sent to a landline
number, rather than a smartphone or similar number. It is not always
readily apparent, given a ten-digit phone number, whether the number
belongs to a landline or not. Exacerbating this potential problem, a
plan administrator who sends an NOIA to a landline may not receive a
bounce-back or any other notification that the recipient's phone
address is a landline that cannot receive text messages. If the plan
administrator did receive such a notification, it would trigger the
substantive protections in paragraph (f)(4) of the safe harbor, which
require a plan administrator to take curative steps if the electronic
address of a covered individual is invalid or inoperable. The inability
of an electronic address to receive, for example, a text message that
is intended to be an NOIA, would mean that the address is in fact
inoperable for purposes of the rule. Some phone carriers offer a
landline service that converts a text message into a voice message,
instead of returning a bounce-back notification. ERISA generally
mandates that disclosures be in writing. Thus, the Department does not
consider receipt of a voice-based message to be operable for purposes
of this rule; the electronic address must be able to accept text
(rather than audio) messaging. To address this concern, the final rule
clarifies that an electronic address that will be used to satisfy
paragraph (b) for a covered individual must be an address at which the
individual may receive and inspect a written NOIA. Plan administrators
who use internet-connected mobile computing device numbers, as opposed
to email addresses, for example, will have to take steps to confirm
with plan participants and beneficiaries, or through other reasonable
means, such as using mobile phone carriers' validator services, to
distinguish landline numbers from mobile or similar numbers that enable
the receipt and inspection of written messages.
 The final rule continues to recognize the validity of employer-
assigned electronic addresses. Paragraph (b) of the proposal, in
relevant part, provides that ``if an electronic address is assigned by
an employer to an employee for this purpose, the employee is treated as
if he or she provided the electronic address.'' The proposal
specifically solicited comments on whether this provision of the
proposal, as distinguished from the provision authorizing participants
to affirmatively provide a personal electronic address to receive
covered documents, should impose additional or different conditions to
ensure that participants receive their disclosures.
 Many commenters supported the proposal's recognition of the
validity of employer-assigned electronic addresses. These commenters
believe the provision is a common-sense technique to facilitate default
electronic delivery: Employers routinely assign employees electronic
addresses as part of their employment, for a variety of business
purposes including human resource management, work-related assignments,
and routine communications. Commenters also noted that the Department's
2002 safe harbor allows for electronic delivery of disclosures to
employer-assigned electronic addresses without the affirmative consent
of participants, and called attention to the lack of reported problems
or harm to participants caused by or attributable to that provision in
the 2002 safe harbor.
 Other commenters, however, raised objections to the proposal's
recognition of the validity of employer-assigned
[[Page 31889]]
electronic addresses. These commenters were particularly concerned
about the language in the proposal that permitted an employer-assigned
address to be created solely for purposes of using the proposed safe
harbor. These commenters were concerned that ineffective disclosure
will result if employers, or service providers or third-party
technology firms hired by employers, create and assign electronic
addresses with unclear or unfamiliar URL components solely to comply
with the new safe harbor. In these circumstances, such attenuated or
ambiguous electronic addresses (e.g., email accounts) may be unfamiliar
to, ignored, overlooked, or forgotten by covered individuals. One
commenter asserted that an employer-assigned electronic address for
purposes of this rule could, in some jurisdictions, constitute a breach
of fiduciary duty.
 Based on these concerns, the Department eliminated the phrase ``for
this purpose'' from the final rule. Paragraph (b) now provides that
participants will be treated as if they provided an electronic address
to an employer if the electronic address is assigned by an employer to
an employee ``for employment-related purposes that include but are not
limited to the delivery of covered documents.'' Thus, to satisfy the
rule's definition of a covered individual, the electronic address
assigned by an employer for an employee must be assigned for some
employment-related purpose other than the delivery of covered documents
under the new safe harbor. An employer could not, for example,
establish for an employee a personal electronic address (e.g., a Google
or Yahoo email account) that will be used by the plan's administrator
only to send notices required by this safe harbor. The employer-
assigned address must have an employment-related purpose other than to
comply with the safe harbor. Whether such an assignment meets ERISA's
furnishing standard is a matter to be determined based on the facts and
circumstances of the particular situation.
 Although the safe harbor recognizes the validity of employer-
assigned electronic addresses, it does not permit plan administrators
to assign them. A few commenters explicitly agreed with the
Department's concern, expressed in the preamble to the proposal, about
the assignment of electronic addresses by plan administrators and
third-party service providers. These believe that misuse could result
from allowing these individuals and entities to assign electronic
addresses, for example, citing a practice under which a plan's service
provider would use commercial locator services or similar people-finder
tools to acquire electronic addresses of plan participants. The
Department agrees, and paragraph (b) of the final rule continues to
prohibit plan administrators or their service providers from assigning
electronic addresses under the new safe harbor. To ensure effective
access to electronic media, paragraph (b) confers this authority only
on an employer with respect to its employees. Accordingly, in response
to one commenter's request for clarification, a plan administrator
could not use a commercial locator service to acquire, and then use,
personal electronic addresses under this safe harbor.
 Similarly, a few commenters raised concerns about application of
the proposed safe harbor to spouses, divorced spouses, and other
beneficiaries who may be entitled to disclosures under ERISA.
Specifically, these commenters believe that it would be inappropriate
for employers to assign electronic addresses for disclosure of covered
documents to these individuals, because, unlike employees participating
in an employer's plan, spouses and other beneficiaries may not have any
real relationship with the employer. The Department agrees with this
concern. Although paragraph (b) of the final rule allows employers to
assign electronic addresses for their employees, employers cannot
assign electronic addresses for non-employee spouses or other
beneficiaries of their plans' participants. For a spouse or other
beneficiary that is entitled to ERISA disclosures to be a covered
individual for purposes of the final rule, the spouse or other
beneficiary must affirmatively provide (or must have provided) the
employer, plan sponsor, or administrator (or appropriate designee) with
an electronic address; otherwise the plan administrator cannot furnish
disclosures to these individuals pursuant to this rule.
 The definition of ``covered individual'' in the final rule does not
exclude participants in multiemployer plans. Commenters representing
multiemployer plans requested confirmation that these individuals could
be covered individuals for purposes of paragraph (b) of the rule. Their
concern stemmed from the proposal's use of the phrase ``as a condition
of employment,'' as a predicate for providing the plan administrator an
electronic address because, according to the commenters, multiemployer
plan sponsors do not have the ability to establish employment
conditions, unlike plan sponsors generally. In this regard, they argue,
multiemployer plans are very different from single-employer plans. The
Department confirms for affected parties that the final rule's
definition of covered individual in paragraph (b) is intended to
include multiemployer plan participants. This necessarily follows from
paragraph (c) of the final rule, which defines the scope of ``covered
documents'' to include all pension benefit plans under ERISA. If the
Department had intended to exclude from this safe harbor a subset of
pension plans, such as multiemployer plans, the exclusion would have
been set forth in paragraph (c) of the final rule. Nevertheless, the
Department has slightly rephrased paragraph (b) to clarify that
providing an electronic address as a condition of employment is only
one way that an individual might supply an electronic address. The
individual might supply it as part of their initial participation in
the plan, or they might supply it otherwise: Through other means and
for other reasons. In addition, in response to one commenter's question
regarding the source of an electronic address, the definition of
``covered individual'' includes multiemployer plan participants who
provide their electronic addresses directly to the plan administrator,
as well as plan participants whose personal or employer-assigned
electronic address is provided to the plan administrator by an
employer.
(2) Covered Documents
(i) Employee Pension Benefit Plans
 Paragraph (c) of the proposal defined the ``covered documents'' to
which the rule would apply. It provided that the safe harbor may be
used by the administrator of a pension benefit plan, as defined in
ERISA section 3(2), to furnish any document that the administrator is
required to furnish to participants and beneficiaries pursuant to Title
I of ERISA, except for any document that must be furnished only upon
request. The proposal clarified that a plan administrator would not be
required to furnish all of these documents, as applicable for a
particular plan, pursuant to the safe harbor if the plan administrator
prefers a different method of furnishing for some of the documents. The
Department requested comments generally as to whether the scope of
covered documents is appropriate, and specifically whether certain
employee pension benefit plan disclosures are better suited for such
electronic disclosure.
[[Page 31890]]
 Commenters generally supported the scope of the definition of
covered documents as including disclosures for pension benefit plans.
The final rule does, however, include two minor revisions. First, in
response to numerous commenters, the Department added the words ``or
information'' to this paragraph to clarify that certain ``information''
required to be disclosed pursuant to 29 CFR 2550.404a-5, the
Department's participant-level fee disclosure regulation, is covered by
the final rule. Second, the Department added the word ``only'' to this
paragraph to clarify the scope of the definition's exception for
documents that must be furnished upon request (the exception now
applies to documents ``that must be furnished only upon request,''
emphasis added).
 Commenters disagreed about this exception. Some commenters argued
that the final rule should not exempt documents that are available upon
request by a covered individual, particularly if the individual agrees
or has not objected to the rule's method for delivery. Other commenters
did not object to the exception, but requested that it be revised to
ensure that the safe harbor's exclusion from covered documents is
limited to documents that are available only upon request. Under ERISA,
some documents must be furnished automatically and others only upon
request by an eligible person.\37\ However, these commenters point out
that in certain cases (including pursuant to this safe harbor)
participants may request copies of many different documents--even
documents that must be furnished automatically, such as the summary
plan description (SPD). The Department's intention, as reflected in the
preamble to the proposed regulation and unchanged for purposes of the
final rule, is that the exception applies to documents that are
furnished only upon request (i.e., the exception does not apply to, and
therefore the final rule includes as covered documents, documents for
which the plan administrator has an affirmative obligation to furnish
but that are also, for various reasons, requested by covered
individuals).\38\ The 2002 safe harbor, if satisfied, remains available
for plan administrators to furnish ERISA disclosures that are excluded
from this safe harbor.
---------------------------------------------------------------------------
 \37\ See, e.g., 29 U.S.C. 1024(b)(4) for the general requirement
that upon written request of any participant or beneficiary, plan
administrators must furnish plan documents including the latest
updated SPD, latest annual report, any terminal report, the
bargaining agreement, trust agreement, contract, or other
instruments under which the plan is established or operated. See
also 29 U.S.C. 1021(k) with respect to multiemployer plan
information provided to participants and beneficiaries upon written
request.
 \38\ 84 FR 56894, 56901 n. 63 (``The proposed safe harbor does
not apply to documents that are furnished only upon request.'').
---------------------------------------------------------------------------
(ii) Employee Welfare Benefit Plans
 The proposed safe harbor did not apply to employee welfare benefit
plans, as defined in section 3(1) of ERISA, such as plans providing
disability benefits or group health plans. The Department instead
reserved paragraph (c)(2) of the proposal so that it could continue to
study the future application of the new safe harbor to documents that
must be furnished to participants and beneficiaries of employee welfare
benefit plans. In the proposal, the Department noted that this
reservation accords with Executive Order 13847, which focuses the
Department's review on retirement plan disclosures. The Department
further explained that it does not interpret the Order's directive as
limiting the Department's ability to take future action with respect to
employee welfare benefit plans, especially to the extent similar policy
goals, including the reduction of plan administrative costs and
improvement of disclosures' effectiveness, may be achieved. The
Department noted in the preamble of the proposal that welfare plan
disclosures, such as group health plan disclosures, may raise different
considerations, such as pre-service claims review and access to
emergency and urgent health care. Moreover, the Department shares
interpretive jurisdiction over many group health plan disclosures with
the Treasury Department and the Department of Health and Human
Services. In considering any possible new electronic delivery safe
harbor for group health plan disclosures in the future, the Department
would consult with these other Departments.
 Many commenters agreed with the Department's reasoning as set forth
in the preamble to the proposed rule. These commenters urged the
Department not to include welfare plans in the final rule, the most
common reason being that welfare plans present unique issues as
compared to other types of employee benefit plans. These commenters
also acknowledged the necessity of the tri-agency consultation process
for any such rule.
 Other commenters, by contrast, encouraged the Department to expand
the final rule to apply to disclosures for welfare plans or begin
immediately the formal process of doing so. These commenters argued
that there is no sound legal or policy basis for excluding welfare
plans, and that significant additional reductions in regulatory costs
and burdens would follow if the safe harbor were expanded to cover
welfare benefit plans, especially group health plans. A few of these
commenters estimated that even extending the safe harbor only to
routine health care denials (e.g., ``Explanation of Benefits'' or
``EOBs'') would save millions of dollars annually for health plan
administration.
 The Department understands that there could be significant cost
savings if the safe harbor were extended to cover welfare plan
disclosures. At the same time, such an extension warrants careful
consideration and analysis that goes beyond the scope of this final
rule. The Department, therefore, has decided not to expand the scope of
the final rule to cover welfare benefit plans at this time. The
Department will continue exploring whether, and under what
circumstances, to extend the safe harbor in the final rule to welfare
benefit plans, and may undertake rulemaking in the future.
(3) Notice of Internet Availability
 As a general rule, the proposal required that plan administrators
furnish to each covered individual an NOIA for each covered document in
accordance with the requirements of this section. A special rule, in
paragraph (i) and discussed below, allowed plan administrators to
combine the content of the required notices for certain covered
documents. Paragraph (d) of the final rule, as in the proposal,
continues to require that plan administrators furnish an NOIA and sets
forth the conditions for satisfying this requirement, as modified to
reflect the Department's response to commenters' views on the notice
requirement.
(i) Timing of Notice of Internet Availability
 Paragraph (d)(2) of the final rule continues to provide that the
plan administrator must furnish an NOIA at the time the covered
document is made available on the website described in paragraph (e).
One commenter argued that, due to the flexibility of online posting,
covered documents should be posted earlier than required by law, for
example that any disclosures affecting covered individuals' benefits
should be posted as soon as reasonably possible after the decision
affecting benefits is made. The Department disagrees that it would be
appropriate, in a rule focused on the acceptable methods for
[[Page 31891]]
delivering required ERISA disclosures, to alter the timing requirements
for the disclosures themselves. As set forth in the preamble to the
proposal, the rule is not intended to alter the substance or timing of
any of ERISA's required disclosures. The rule merely expands the
possible delivery methods for disclosures. ERISA and the regulations
thereunder include thoughtfully prescribed timelines for each required
disclosure; the Department maintains that any changes to those
substantive, legal standards would have to be made on a disclosure-by-
disclosure basis, subject to the regulatory process, including public
notice and comment. The Department does agree with this commenter,
however, that, for similar reasons, it would not be necessary or
appropriate to include any extensions to the timing requirements for
covered documents that are posted online.
 As in the proposal, the final rule continues to allow plan
administrators to furnish a combined NOIA each plan year for more than
one covered document. If a combined NOIA was furnished in the prior
plan year, the next plan year's combined NOIA must be furnished no more
than 14 months later. As discussed below, however, the covered
documents that may be combined pursuant to paragraph (i) of the final
rule have changed. The final rule continues to provide plan
administrators with a 14-month period to comply with the annual NOIA
requirement. The Department does not want plan administrators to have
to push back the date of furnishing from year to year to avoid the risk
that they run afoul of a strict 12-month requirement, and the
Department acknowledges that actual disclosure dates can vary slightly
from year to year. The two-month grace period should offer sufficient
flexibility without compromising individuals' receipt of an NOIA on a
periodic, essentially annual, basis. The Department did not receive any
comments disagreeing with this approach or arguing that different
timing requirements would be preferable.
 The Department also reminds plan administrators that if they choose
to furnish a consolidated NOIA once a year under paragraph (i) of the
rule, doing so will not change the date on which the covered documents
must be made available on the website. Each covered document described
in the consolidated NOIA must be made available on the website no later
than the date it must be furnished to participants and beneficiaries by
law.
(ii) Content of Notice of Internet Availability
 Paragraph (d)(3)(i) through (vii) of the proposal listed the
content requirements for the NOIA. Paragraph (d)(3)(i) of the proposal
required a prominent statement, for example as a title, legend, or
subject line that reads, ``Disclosure About Your Retirement Plan.''
Paragraph (d)(3)(ii) required this statement: ``Important information
about your retirement plan is available at the website address below.
Please review this information.'' Paragraph (d)(3)(iii) required a
brief description of the covered document. Paragraph (d)(3)(iv)
required ``the internet website address where the covered document is
available.'' Paragraph (d)(3)(v) required a statement of the right to
request and obtain a paper version of the covered document, free of
charge, and an explanation of how to exercise this right. Paragraph
(d)(3)(vi) required a statement of the right to opt out of receiving
covered documents electronically, and an explanation of how to exercise
this right. Finally, paragraph (d)(3)(vii) required a telephone number
to contact the plan administrator or other designated representative of
the plan.
 The Department requested comments on these content requirements and
whether the NOIA would adequately serve its intended purpose, which is
to provide very concise and clear notification to covered individuals
about covered documents available on the website. As a general matter,
some commenters believe that the content requirements are excessive,
while others merely stated that the Department should be less
prescriptive about the content requirements, and allow plan
administrators greater flexibility for innovation. Commenters also
provided significant feedback on specific content provisions in the
proposal. Although not all of these suggestions were implemented in the
final rule, the Department is persuaded by commenters that its
intention for the NOIA may be better achieved by adopting some
revisions to the NOIA's content requirements. Due to these revisions,
the Department also restructured paragraph (d)(3), making non-
substantive changes to the lettering and numbering of subsections. The
following paragraphs set forth commenters' views with respect to each
of the specific NOIA content provisions and, where applicable, changes
that have been made for purposes of the final rule.
 The Department has adopted the first two content requirements today
with only minor revision from the proposed rule. As in paragraph
(d)(3)(i) of the proposal, now (d)(3)(i)(A) in the final rule, the NOIA
must include a prominent statement--for example as a title, legend, or
subject line--that reads: ``Disclosure About Your Retirement Plan.''
Commenters did not object to this statement or its prominence. The
statement required by paragraph (d)(3)(ii) of the proposal, now
(d)(3)(i)(B) in the final rule, has been revised to be technologically
neutral. As finalized, the NOIA must include the following statement:
``Important information about your retirement plan is now available.
Please review this information.'' A few commenters disagreed with the
use of the word ``Important'' and the Department's provision of
required language for this statement. As one commenter explained, the
word ``important'' may become meaningless as NOIAs are regularly
received. The Department disagrees that the use of the word
``Important'' is problematic. Even as covered individuals become
accustomed to this framework for disclosure and receive notices over
time, there is no harm in highlighting what the Department believes to
be ``important'' retirement plan information; federal law, after all,
does require disclosure of this information for a reason. The
Department also is not persuaded that the rule's required language for
the statement in (d)(3)(i)(B) is problematic, especially as revised to
more broadly apply to different electronic delivery methods. Very few
commenters objected to this language, and a number of commenters
expressly stated that they would not object to model language for some
of the safe harbor's notice requirements. The statement is brief and
straightforward, and plan administrators often prefer to have specific
guidance when making such statements to reduce risk that language
drafted at their discretion will be insufficient.
 The Department has decided to make a few revisions to paragraph
(d)(3)(iii) of the proposal, now (d)(3)(i)(C), in response to public
comments. An NOIA, under the final rule, must include ``[a]n
identification of the covered document by name (for example, a
statement that reads: `your Quarterly Benefit Statement is now
available') and a brief description of the covered document if
identification only by name would not reasonably convey the nature of
the covered document.'' Many commenters on the proposal requested
additional guidance on what would be expected as a ``brief
description'' of a covered document and worried that this
[[Page 31892]]
requirement could result in too much information on what is supposed to
be a very short notice. Suggestions included requiring that the brief
description be limited to no more than a sentence or two, or even
consolidating the first few content requirements and merely requiring
identification of the covered document. The Department agrees that it
may not always be necessary, to the extent the nature of a covered
document is clear by its name, to include a brief description and that
inconsistent application of the standard could result in longer, and
more complex, NOIAs. The final rule requires a brief description only
when identifying a covered document by name would not reasonably convey
the nature of the covered document. Otherwise, only identification of
the covered document by name is required. For example, an NOIA for a
quarterly benefit statement ordinarily would not need a brief
description. Quarterly benefit statements are furnished every three
months and their content, which includes periodic personalized benefit
account information for a covered individual, generally is well
understood by individuals. Alternatively, the Department expects that a
plan administrator furnishing an NOIA for a blackout notice would need
to include a brief description to comply with this requirement.
Blackout notices typically are not furnished on a recurring basis, and
the circumstances surrounding the provision of a blackout notice may
not be clear to many covered individuals. It is not unlikely, for
example, that some covered individuals will have never before received
a blackout notice. The Department believes that these modifications are
responsive to commenters' concerns without undercutting the important
message NOIAs are intended to convey.
 Paragraph (d)(3)(iv) of the proposal, now (d)(3)(i)(D) in the final
rule, also reflects limited revision in response to commenters'
questions about whether plan administrators could use a hyperlink on an
NOIA, rather than simply a website address. The Department did not
intend to limit NOIAs to including only website address citations: Plan
administrators are encouraged to use hyperlinks that take covered
individuals directly to a website address. The rule has been revised
explicitly to include hyperlinks.\39\
---------------------------------------------------------------------------
 \39\ The Department did not adopt one commenter's recommendation
that final guidance require hyperlinks or the ability to hover over
words that previously have been defined. Although the rule now
explicitly includes hyperlinks in addition to website addresses, the
Department is not persuaded that hyperlinks should be mandatory;
further, it is unclear whether the commenter's suggestion that
covered individuals must be able to hover over defined terms is
meant to apply to notices (which are intended to be concise, clear
documents notifying of internet availability, rather than substance)
or more likely to the covered documents themselves. This rule is not
intended to change substantive requirements of covered documents,
such as the use of (and hyperlink capabilities associated with)
defined terms.
---------------------------------------------------------------------------
 A few commenters addressed the standard in paragraph (d)(3)(iv) of
the proposal, now (d)(3)(i)(D), that the required internet website
address must be ``sufficiently specific'' to provide ready access to
the covered document (or, in the case of a combined NOIA, covered
documents).\40\ A website address (or hyperlink) will satisfy this
requirement if it leads the covered individual directly to the covered
document. A website address (or hyperlink) also will satisfy the
``sufficiently specific'' standard if the address leads the covered
individual to a login page that provides, or immediately after a
covered individual logs on provides, a prominent link to the covered
document. Most commenters did not respond with suggestions for how to
improve the ``sufficiently specific'' standard, except for requesting
minor clarifications. The very few commenters that did address the
standard disagreed with each other on the problem; for example, one
commenter believed that the ``sufficiently specific'' standard is too
prescriptive and should allow more flexibility, especially to
accommodate future technology, whereas another commenter argued that
the standard is not sufficiently protective of covered individuals and
that the notice should take individuals straight to the disclosure
(following a secure login, as applicable). Similarly, very few
commenters addressed whether additional or different security
procedures or information about login or similar procedures should be
included in the notice. Most believe this additional information will
only further clutter the notice and detract from key information, and
that security procedures and protocols may become quickly outdated. One
commenter asked the Department to require a separate notice including
login and security information, but did not offer specific commentary
on security or privacy language that should be required. Following its
review of commenters' views, the Department decided to retain the
``sufficiently specific'' standard, which now applies whether the
notice includes a website address or a hyperlink to such address, and
made other non-substantive revisions to simplify the paragraph.
---------------------------------------------------------------------------
 \40\ See, e.g., 29 CFR 2550.404a-5(d)(v), which similarly
requires disclosure of specified information at ``[a]n internet
website address that is sufficiently specific to provide
participants and beneficiaries access to'' such information
(emphasis added). The Department is not aware of any evidence that
plan administrators need further clarification or that this standard
is ineffective. The proposal nonetheless included, and the final
rule continues to include, two non-exclusive methods for website
access that satisfy this standard.
---------------------------------------------------------------------------
 The next two content requirements proposed in paragraphs (d)(3)(v)
and (vi), which are now contained in paragraphs (d)(3)(i)(E) and (F) of
the final rule, have been adopted with only minor amendment to clarify
that requests for a specific paper version, and requests to opt out are
both fulfilled free of charge. An NOIA must include a statement of the
right to request and obtain a paper version of the covered document,
free of charge, and an explanation of how to exercise this right (under
(d)(3)(i)(E)); and a statement of the right, free of charge, to opt out
of electronic delivery and receive only paper versions of covered
documents, and an explanation of how to exercise this right (under
(d)(3)(i)(F)). Commenters overall did not object to requiring that the
notice explain covered individuals' rights to request paper or opt out
of electronic delivery. The Department continues to believe these are
vitally important and protective rights for covered individuals and is
not persuaded by the one commenter who requested that these statements
be removed. A couple of commenters suggested that these rights should
be ``prominently'' displayed and that the notice should include
detailed instructions about how to opt out and any timelines for doing
so. The Department did not adopt these suggestions. Given the very
limited content of the NOIA, nearly everything arguably is
``prominent,'' and adding more and more content and specifications
would only undermine the intended brevity and simplicity of the notice.
 The final rule includes one additional content requirement, in
paragraph (d)(3)(i)(G), to respond to several commenters' suggestion
that covered individuals should be made aware that covered documents
may not always be available online. The Department agrees that covered
individuals would benefit from such a warning or reminder, so that they
can take any desired action to print or save covered documents, or
possibly request a paper copy of a covered document. As discussed below
in detail, plan administrators are not required to maintain covered
documents online indefinitely for purposes of
[[Page 31893]]
satisfying this electronic delivery safe harbor. Thus the final rule
now requires an NOIA to include a cautionary statement that the covered
document is not required to be available on the website for more than
one year or, if later, after it is superseded by a subsequent version
of the covered document. This requirement will ensure that covered
individuals understand that covered documents will not be available
online indefinitely. Plan administrators could, for example, draft the
cautionary statement in a manner that encourages covered individuals to
print, save, or otherwise preserve covered documents.
 A few commenters found paragraph (d)(3)(vii) of the proposal, now
(d)(3)(i)(H), requiring a contact telephone number to be deficient, for
example suggesting that the rule should mandate toll-free telephone
numbers both for the employer or plan administrator and for the
Department. The Department did not adopt a requirement that the
telephone number must be toll-free, because such a requirement would
place a costly and unnecessary burden on plan sponsors, particularly
for sponsors of small plans that might be located in the vicinity of
most of their participants without the need for any long-distance
calling. Further, the Department is unaware of any problems or
objections from plan participants with the telephone number that is
required as contact information in the participant-level fee disclosure
regulation (which similarly does not require a toll-free number).\41\
In any event, the safe harbor does not preclude plan administrators
from providing (and including on the NOIA) a toll-free number. The
Department was not persuaded that this final content requirement from
the proposal should be revised. Paragraph (d)(3)(i)(H) of the final
rule continues to require a telephone number to contact the plan
administrator or other designated representative of the plan.
---------------------------------------------------------------------------
 \41\ See 29 CFR 2550.404a-5(d)(2)(i)(A).
---------------------------------------------------------------------------
 The Department declined to adopt a number of additional content
requirements suggested by some commenters.\42\ For example, one
commenter on paragraph (d)(3)(vii) of the proposal, now (d)(3)(i)(H),
argued that the notice's content should be expanded to include an
explanation that the number may be used for paper and opt-out requests
as well as other questions, with a required response time of no more
than 72 hours. Covered individuals will not necessarily be better
informed by, and are more likely to ignore, a long and detailed notice
that they receive repeatedly. The purpose of the NOIA is to highlight
for covered individuals that a retirement plan document is available
online, not to become a new and comprehensive disclosure of ERISA
rights and responsibilities in itself.
---------------------------------------------------------------------------
 \42\ Examples of additional statements that commenters suggested
for the NOIA include that it is the covered individual's
responsibility to notify the plan administrator of a new electronic
address; where historical versions of documents can be obtained; the
significance of the covered document and what has changed since the
last version; that there will be no retaliation for choosing paper;
that notices and covered documents should be printed and saved for
personal records; the right to print covered documents at an
employer's place of business; and the availability of the plan
administrator to assist with passwords.
---------------------------------------------------------------------------
 Based on additional feedback from commenters and analysis of the
circumstances that may in fact warrant additional content on an NOIA,
however, the Department adopted one more provision to the final safe
harbor in paragraph (d)(3)(ii). As opposed to the preceding content
requirements for the notice in paragraph (d)(3)(i), the information
described in paragraph (d)(3)(ii) (ii) is not required. An NOIA
furnished pursuant to the safe harbor may (but is not required to)
contain a statement as to whether action by the covered individual is
invited or required in response to the covered document and how to take
such action, or that no action is required, provided that such
statement is not inaccurate or misleading. The Department included this
new provision because it was persuaded by commenters that covered
individuals may find it advantageous to be notified whether some action
on their part is (or is not) invited or required in response to the
notice. The rule does not preclude plan administrators' discretion to
include this information, although it is not required. Plan
administrators, however, must ensure that any statement about action
that may or must be taken, or that no action is needed, is not
inaccurate or misleading. For example, in the Department's view, it
would ordinarily be inaccurate and misleading for a plan administrator
to state on an NOIA for a benefits claim denial under section 503 of
ERISA that no action is invited or required. Even if a covered
individual chooses to ignore the NOIA and not initiate an appeal, a
benefits claim denial, by its very nature, is an invitation to take
action, and requires such action within a specific timeframe or else
the claimant may forfeit a right to a benefit.
 Finally, as to the content required for the NOIA, the Department
requested comments on whether affected parties believed that a model
NOIA would be useful, and asked that parties submit sample models for
the Department's consideration. Although a few commenters stated that
they did not necessarily object to the provision of a model NOIA, many
commenters responded that a model is not necessary, for example because
the NOIA content and other requirements are sufficiently clear, or more
explicitly that the Department should not adopt a model, because, given
the large variety in retirement plan features and designs, a model
could be insufficiently flexible and ultimately interfere with the
ability of plan administrators to appropriately prepare NOIAs for their
plans.\43\ The public record, therefore, did not demonstrate a
meaningful level of interest in having a model NOIA published with the
final rule. The Department also did not receive any sample models from
commenters. Given this overall lack of interest, and in light of
changes made to improve the required content of the NOIA in response to
commenters' concerns, the Department has not included a model NOIA in
the final rule.\44\
---------------------------------------------------------------------------
 \43\ One commenter supported the Department's development of a
model notice, and explained that to do so properly would require as
long as six months. For the reasons stated herein, however, the
Department has declined to adopt a model NOIA at this time.
 \44\ The Department similarly did not adopt a model for the
initial notification required under paragraph (i) of the rule,
discussed in detail below. As with the NOIA, commenters did not
necessarily object to a model, but there was not consistent or
strong support for a model for either notice.
---------------------------------------------------------------------------
(iii) Form and Manner of Furnishing Notice of Internet Availability
 The Department intends the NOIA to be a succinct, understandable
disclosure that will convey its importance and easily call the
recipient's attention to the availability of a covered document. With
this goal in mind, paragraphs (d)(4)(i) through (iv) of the proposed
rule set forth standards for the form and manner of furnishing the
notice. As proposed, an NOIA had to first, be furnished electronically
to the address referred to in paragraph (b) of the proposal; second,
contain only the content specified in paragraph (d)(3) of the proposal,
except that the plan administrator could include pictures, logos, or
similar design elements, so long as the design was not inaccurate or
misleading; third, be furnished separately from any other documents or
disclosures furnished to covered individuals, except as permitted under
paragraph (i) of the proposal (which addressed the consolidation of
certain notices of internet availability on an annual basis); and
fourth, be written in a manner calculated to be understood by
[[Page 31894]]
the average plan participant. The proposal elaborated on this fourth
condition, explaining that a notice that uses short sentences without
double negatives, everyday words rather than technical and legal
terminology, active voice, and language that results in a Flesch
Reading Ease test score of at least 60 would satisfy the fourth
requirement.\45\
---------------------------------------------------------------------------
 \45\ See, e.g., general information about this formula for
writing in plain English, at https://web.archive.org/web/20160712094308/http://www.mang.canterbury.ac.nz/writing_guide/writing/flesch.shtml (Rudolf Flesch).
---------------------------------------------------------------------------
 The proposal required that the NOIA be furnished by itself. The
NOIA contains important information alerting covered individuals that
retirement plan disclosures are available online. This information
should not be obscured by commercial advertisements or even other
ERISA-required disclosures. The second and third requirements in
paragraph (d)(4) of the proposal were intended to achieve this
objective. Any additional information or content had to be limited; to
permit otherwise would have frustrated the Department's goal of a
clear, concise notice. To the extent design elements could enhance the
appearance of the NOIA and possibly increase the likelihood that it
would draw the desired attention of covered individuals, however, the
proposal did not exclude the use of pictures, logos, and similar design
elements, so long as the design was not inaccurate or misleading and
the required content was clear.
 Plan administrators must write clear and understandable notices of
internet availability, and to that end the proposal relied on the
standard measure for readability of ERISA disclosures--that the annual
notice be ``written in a manner calculated to be understood by the
average plan participant.'' Due to the concise nature of the NOIA,
however, paragraph (d)(4)(iv) of the proposal included additional
guidelines for plan administrators to satisfy the readability
requirement, and plan administrators were encouraged to apply the plain
language concepts described above (including the Flesch Reading Ease
test). The Department incorporated these concepts to further improve
individuals' comprehension of the information on the NOIA and to
provide plan administrators a safe harbor, essentially, to satisfy the
readability standard for purposes of the proposed safe harbor.
 Commenters had a variety of general observations about the form and
manner by which an NOIA must be furnished. For example, some commenters
asked the Department to provide flexibility in how the notice may be
furnished, not just by email but by text messages, mobile application
notifications, and future innovations. Alternatively, some commenters
requested that the rule be revised to allow plan administrators to
furnish the NOIA in paper form, or electronic form, based on a
determination by the plan administrator. Allowing paper disclosure
would, these commenters explained, somewhat alleviate their concerns
about the revocation of FAB 2006-03, discussed below in the section
titled ``Transition Issues.'' Other commenters argued that allowing
paper would reduce their concern that disclosures may not be received
by covered individuals, winding up in a spam folder or otherwise
buried.
 The Department notes that, similar to the discussion below with
respect to the concept of a ``website,'' the final rule is intended to
apply to a broad range of technologies in addition to emails and
internet browser websites. Indeed, the Department specifically designed
the rule to accommodate future technological innovations that can be
used in compliance with the standards of the safe harbor. By its terms,
the rule does not limit furnishing of the NOIA to email; the notice
could, for example, be sent by text message. The Department did not,
however, adopt certain commenters' suggestion that plan administrators
should be able to furnish the NOIA in paper form.\46\ One of the goals
in adopting this safe harbor is to advance the use of electronic tools
to enhance the effectiveness of, and reduce the costs associated with,
ERISA disclosures. The Department maintains that it is important for
covered individuals to receive an initial notice, on paper, alerting
them that disclosures will be furnished using different procedures. But
after that, the safe harbor will create consistency by requiring plan
administrators to communicate electronically. As to ensuring the
receipt of electronic notices, the rule includes a specific provision
in paragraph (f)(4) requiring that action be taken in response to
invalid or inoperable electronic addresses. Accordingly, paragraph
(d)(4)(i) of the final rule adopts the proposal's requirement that an
NOIA must be furnished electronically to the address referred to in
paragraph (b) of the safe harbor.
---------------------------------------------------------------------------
 \46\ The Department believes that commenters' support for paper
NOIAs was due, in part, to the fact that some plan administrators
currently rely on Field Assistance Bulletin 2006-03, which permits a
paper notice, to furnish pension benefit statements. The Department
understands that for these administrators, reliance on this final
rule will require them to modify their procedures with respect to
notices for benefit statements and consequently is providing an 18-
month transition period during which plan administrators can
implement such modifications. FAB 2006-03 and the transition period
are discussed further below, under the heading ``Transition
Issues.''
---------------------------------------------------------------------------
 The Department also received more specific comments on the
requirements of section (d)(4) of the proposal. In response to
paragraph (d)(4)(ii) of the proposal, limiting the content of the NOIA
but permitting specified design elements, a few commenters requested
clarification that covered individuals will not be forced to wade
through what are essentially marketing communications as purported
``design'' elements that could overtake the actual content of the
notice. And more importantly to these commenters, covered individuals
should not be confused by suggestible endorsements and advertising. The
Department appreciates commenters' concern that the content of the
required NOIA must be clear and direct, and that the NOIA should not be
used as marketing or sales material to the extent the NOIA is prepared
by a plan service provider. However, the Department believes that these
concerns are mitigated by the requirement in paragraph (d)(4)(ii) that
design elements not be inaccurate or misleading and that the required
content be clear. The purpose of the notice is to communicate the
availability of an online disclosure, and plan administrators are
responsible for ensuring that this purpose is not obscured.
 Paragraph (d)(4)(iii) of the final rule requires that an NOIA must
be furnished separately from any other documents or disclosures except
as permitted, and discussed below, by paragraph (i) of the final rule.
Some commenters questioned whether the NOIA must be furnished
separately if it accompanies the covered document (e.g., an email
notice with an attached PDF version of the covered document); this
matter is addressed by the addition to the final rule of paragraph (k),
discussed below, permitting such direct delivery of covered documents.
 The Department received significant commentary on the readability
standard in paragraph (d)(4)(iv) of the proposal with its references to
short sentences, active voice, and the Flesch reading ease score. Most
commenters strenuously objected to the inclusion of these additional,
more specific measurements to assess the readability of NOIAs. These
commenters argued that the Department's existing standard, ``written in
a manner calculated to be understood by the average plan participant,''
is sufficient and well understood. They asserted that, in their
[[Page 31895]]
view, including additional standards, particularly standards based on
the application of a Flesch reading ease score, would increase the
costs of compliance with the safe harbor without obvious benefits. Even
though the new standards were proposed as examples of compliance with
the general standard, rather than as independent requirements, the
commenters argued that there is a good chance the standards would be
interpreted as a new legal standard, not only for this final rule's
notices but for other ERISA disclosures, such as the SPD. The Flesch
reading ease score was especially problematic for commenters, who
suggested that perhaps it could be used as a goal, but is not
appropriate as a required score.\47\ If the Department retained this
standard, they argued, it would have to be clear that it applied only
in the context of this safe harbor, even though such a statement would
not necessarily preclude its expected application in other contexts.
Only one commenter supported these additional criteria, and that
commenter suggested that their inclusion should only be a first step
and that additional standards, including for the design and layout of
notices, should be included. The same commenter cautioned that the
Department should also test NOIAs to ensure they are understandable.
---------------------------------------------------------------------------
 \47\ One commenter suggested that, if the Department wishes to
include additional standards for plan administrators to achieve
``readability,'' the final rule should include only the Flesch
reading ease score, an objective standard.
---------------------------------------------------------------------------
 In response to commenters' concerns, the Department has removed
from paragraph (d)(4)(iv) the more detailed guidelines for meeting the
general readability standard. The final rule requires that the NOIA
must be written in a manner calculated to be understood by the average
plan participant. Although those additional guidelines may be helpful
tools suitable for drafting clear and simple notices under this rule,
the Department agrees with commenters that it would not be desirable to
imply that these guidelines are mandatory for ERISA disclosures or
notices in general. The Department also acknowledges some of the more
specific objections that commenters raised. For example, it may not be
possible to consistently achieve a Flesch reading ease test score of at
least 60, especially for NOIAs that consolidate content for more than
one covered document, as permitted by paragraph (i) of the rule. Some
experts posited that using ``one-size-fits-all'' scoring programs does
not always result in effective communications.\48\ Although the
Department has declined to include the proposal's specific guidelines
in the final rule, it will continue to analyze readability and other
measures in connection with the responses to the RFI on general
disclosure issues that was published with the proposed rule. In the
meantime, plan administrators may look to the Department's SPD
regulations for guidance on the meaning of ``written in a manner
calculated to be understood by the average plan participant.'' \49\
---------------------------------------------------------------------------
 \48\ See, e.g., Janan, D., Wray, D., ``Readability: The
limitations of an approach through formulae'' (2012) (readability
formulae found to be inadequate), at http://www.leeds.ac.uk/educol/documents/213296.pdf. See also Crossley, S.A., Allen, D., &
McNamara, D. S., ``Text readability and intuitive simplification: A
comparison of readability formulas'' (Apr. 2011, Vol. 21, No. 1, pp.
84-101) (traditional readability formulas weak due to reliance on
overly simplistic mechanisms), at http://nflrc.hawaii.edu/rfl. But
compare Federal Plain Language Guidelines, (March 2011, Rev. 1, May
2011) (federal agencies should apply user testing techniques to aid
compliance with The Plain Writing Act of 2010 (P.L. 111-274) (Oct.
13, 2010),)), at https://plainlanguage.gov/guidelines/.
 \49\ See 29 CFR 2520.102-2(a) (``The summary plan description
shall be written in a manner calculated to be understood by the
average plan participant and shall be sufficiently comprehensive to
apprise the plan's participants and beneficiaries of their rights
and obligations under the plan. In fulfilling these requirements,
the plan administrator shall exercise considered judgment and
discretion by taking into account such factors as the level of
comprehension and education of typical participants in the plan and
the complexity of the terms of the plan. Consideration of these
factors will usually require the limitation or elimination of
technical jargon and of long, complex sentences, the use of
clarifying examples and illustrations, the use of clear cross
references and a table of contents.'').
---------------------------------------------------------------------------
(iv) Standards for Internet Website
 The proposed safe harbor included minimum standards concerning the
availability of covered documents on a website, which were set forth in
paragraphs (e)(1) through (3) of the proposal. Generally these
standards remain intact. The principal changes, discussed below,
include revisions to the website retention requirement, in paragraph
(e)(2)(ii) of the final rule, and a new provision, in paragraph (e)(4),
to address the application of the safe harbor to mobile apps.
 Paragraph (e)(1) of the proposal stated the general requirement
that plan administrators must ensure the existence of an internet
website at which covered individuals are able to access covered
documents. This provision is adopted without change. This paragraph
holds the plan administrator responsible for ensuring the establishment
and maintenance of the website. The Department understands that, in
many cases, some or all of the responsibilities associated with the
website may be delegated to plan service or investment providers or
other third parties, as frequently occurs now for other aspects of plan
administration. Any such delegation is subject to the plan
administrator's compliance with paragraph (j) of the safe harbor,
``Reasonable procedures for compliance,'' discussed below, and the plan
administrator's general obligation as a plan fiduciary under ERISA
section 404 to prudently select and monitor such parties.\50\
---------------------------------------------------------------------------
 \50\ One commenter specifically expressed concern about service
providers' potential misuse of plan and account information, for
example covered individuals' personal financial information, that is
obtained in connection with their provision of plan services,
including furnishing information and disclosures, or maintaining a
website, to comply with this rule. The commenter suggested that the
Department should prohibit the use of any such information to market
or sell non-plan products and services to covered individuals. This
commenter's concern is beyond the scope of this safe harbor, which
addresses only a plan administrator's compliance with ERISA's
standard for the furnishing of covered documents to covered
individuals.
---------------------------------------------------------------------------
 A few commenters argued that paragraph (e)(1) of the proposal sets
a higher, strict liability, standard for plan administrators that is
not appropriate. The Department disagrees with these commenters. The
existence of an internet website is integral to the successful
execution of the notice-and-access framework adopted in the final rule.
Without an accessible website that includes the covered document, the
plan administrator has not effectively ``furnished'' the document under
the notice-and-access portion of this safe harbor.\51\ Consequently,
the Department cannot accept a lesser standard, for example that the
plan administrator must ``take measures reasonably calculated'' to
ensure the website's existence, as was suggested by a few commenters.
The Department also disagrees that this standard results in strict
liability. The final rule explicitly provides relief in paragraph (j),
discussed below, for reasonable events that may interrupt the
availability of covered documents on the website. Temporary
interruptions due to internet connectivity problems, routine
maintenance, or network disturbances do not necessarily mean that the
plan administrator failed to ensure the existence of the website
pursuant to this safe harbor.
---------------------------------------------------------------------------
 \51\ Other methods of furnishing covered documents
electronically do not require the existence of a website. See
paragraph (k) of the final rule.
---------------------------------------------------------------------------
 One commenter requested that the Department modify paragraph (e)(1)
of the proposal to prohibit website addresses from changing for at
least
[[Page 31896]]
some specified period of time, because website addresses can shift over
time. The Department declines to adopt this suggestion. The final rule,
in paragraph (e), relating to minimum standards for the website,
contains a new provision requiring that covered documents remain
available on the website for a specified time. In addition, paragraph
(d)(3)(i)(D) of the final rule requires each NOIA to contain a
sufficiently specific website address or hyperlink to provide ready
access to the covered document. Collectively, these two provisions
provide for easily locatable content available for a long enough time.
At this time, the Department therefore declines to establish additional
prescriptive mandates on website management or website maintenance,
such as hyperlink redirects or hyperlink expiration rules, in response
to this comment.
 Paragraph (e)(2) of the proposal contained six paragraphs.
Paragraph (e)(2)(i) of the proposal provided that the covered document
must be available on the website no later than the date on which the
covered document must be furnished under ERISA. Paragraph (e)(2)(ii)
required that a covered document remain available on the website until
it is superseded by a subsequent version of the covered document.
Paragraph (e)(2)(iii) required that a covered document be presented on
the website in a manner calculated to be understood by the average plan
participant. Paragraph (e)(2)(iv) of the proposal provided that the
covered document must be presented on the website in a widely-available
format or formats that are suitable to be both read online and printed
clearly on paper. Paragraph (e)(2)(v) provided that the covered
document must be searchable electronically by numbers, letters, or
words. Finally, under paragraph (e)(2)(vi) of the proposal, the covered
document must be presented on the website in a widely-available format
or formats that allow the covered document to be permanently retained
in an electronic format that satisfies the requirements of paragraph
(e)(2)(iv) (requiring a format that can be read online and printed
clearly on paper). Paragraph (e)(2)(vi) of the proposal was included to
enable covered individuals to keep a copy of the covered document, for
example, by saving it to a file in electronic format, on a personal
computer.
 A significant number of commenters focused on the requirement, in
paragraph (e)(2)(ii) of the proposal, relating to how long covered
documents must remain available on the website. This provision in the
proposal required that a document must remain available until ``it is
superseded by a subsequent version of the covered document.'' This
provision was intended to ensure that covered individuals have readily
available the information they need to protect and enforce their rights
under ERISA and the plan, especially the SPD for example. The
Department requested comments as to whether there are circumstances
when a superseded document may still be relevant to a covered
individual's claims or rights under the plan and, if so, whether
additional or different conditions are needed to address such
circumstances. The Department also invited comments on whether a final
rule should explicitly address the category of covered documents that
technically do not become superseded by reason of a subsequent version
of the covered document, but instead cease to have continued relevance
to covered individuals (e.g., a blackout notice).
 The Department received a wide range of comments on paragraph
(e)(2)(ii) of the proposal. A few commenters, who were generally
opposed to the new safe harbor, argued that all covered documents
should be retained on the website indefinitely, regardless of continued
relevance. Many more commenters, however, supported the proposed
retention provision, but even these commenters suggested a need for a
clearer standard for the category of covered documents that technically
do not become superseded by reason of a subsequent version of the
covered document, such as blackout notices under section 101(i) of
ERISA or notices of the right to divest employer securities under
section 101(m) of ERISA. For this subset of covered documents,
commenters offered a variety of suggestions for how long such documents
should be retained on the website. A number of commenters, for example,
suggested that such documents should be retained on the website ``until
they cease to have relevance,'' leaving it to the plan administrator to
determine whether and when a document ceases to be relevant. Other
commenters, however, strongly preferred that the Department set a
defined length of time, with comments ranging from one to three years.
These commenters emphasize that there is a benefit to having a bright
line standard for compliance purposes.
 After considering the comments received, the Department has decided
a one-year posting requirement strikes the appropriate balance between
ensuring participants have reasonable electronic access to current
documents and the appropriate scope of this regulation, which provides
a safe harbor for furnishing requirements, not underlying retention
requirements. The one-year period in paragraph (e)(2)(ii) of the final
rule is responsive to both of the principal observations by most
commenters: First, by specifically addressing the fact that not all
covered documents are in fact superseded by another version; and
second, by providing clear time limits for website retention of these
covered documents. Affected parties will benefit from the
administrative simplicity and consistency of a bright-line test to
follow when managing, or accessing, covered documents on a website.
Accordingly, paragraph (e)(2)(ii) of the final rule now provides that a
covered document must remain available on the website until it is
superseded by a subsequent version of the covered document, if
applicable, but in no event less than one year after the date the
covered document is made available on the website pursuant to paragraph
(e)(2)(i) of the rule.\52\ Under this standard, all covered documents
must remain on the website for at least one year from the date they
were first posted on a website. This will protect participants from
confusion and uncertainty about how long their documents will be
available on a website. Some covered documents, for example, the SPD,
must remain on a website until they are superseded by a subsequent
version of themselves, even if longer than one year from the date they
were originally posted on a website.
---------------------------------------------------------------------------
 \52\ These safe harbor requirements are not retroactive. Plan
administrators are not required to go back and post historical
versions of covered documents, dated prior to the effectiveness of
this final rule, on the website. The Department intends these
website retention provisions to be prospective in nature.
---------------------------------------------------------------------------
 The following examples illustrate how paragraph (e)(2)(ii) of the
final rule applies to several different covered documents.
 Example 1. A plan's SPD is furnished under the new safe harbor on
January 1, 2025 (``2025 SPD''). Thus, it is first posted on the website
on the same date. The plan is materially amended in 2026, and a summary
of material modifications (SMM) was timely furnished. A new SPD is
furnished via posting on the website on January 1, 2030 (``2030 SPD''),
reflecting the 2026 amendment. The 2025 SPD must remain on the website
at least until January 1, 2030, the date the updated 2030 SPD is
furnished superseding the 2025 SPD. In this example, the 2025 SPD is
superseded by a subsequent covered document more than one year after
the
[[Page 31897]]
date it was first made available on the website.
 Example 2. A pension benefit statement for a participant in a
defined benefit pension plan is furnished on January 1, 2030 (``2030
PBS''), via posting it on the website on the same date. Subsequently,
the plan furnished the same participant the next pension benefit
statement on January 1, 2033 (``2033 PBS''), via posting it on the
website on the same date. The 2030 PBS must remain on the website until
January 1, 2033, when it is superseded by the 2033 PBS. In this
example, the 2030 PBS was superseded by a subsequent covered document
more than one year after the date it was first made available on the
website.
 Example 3. A pension benefit statement for a participant in a
participant-directed defined contribution pension plan was furnished on
January 1, 2030, via posting it on the website on the same date (``Q1
Benefit Statement''). Subsequently, the plan furnishes the same
participant the next pension benefit statement on April 1, 2030, via
posting it on the website on the same date (``Q2 Benefit Statement'').
The Q1 Benefit Statement must remain on the website until January 1,
2031, one year after it was first posted to the website. In this
example, even though the Q1 Benefit Statement was superseded on April
1, 2030, the date on which the Q2 Benefit Statement is posted, the Q1
Benefit Statement must remain on the website for at least one year,
i.e., at least until January 1, 2031.
 Example 4. A blackout notice is furnished to all plan participants
on January 1, 2029, via posting it on the website. The blackout notice,
among other things, announced an upcoming 30-day blackout period ending
on March 15, 2029. The blackout notice must remain on the website until
at least January 1, 2030. In this example, even though the blackout
period ended on March 15, 2029, the blackout notice must remain on the
website for at least one year, i.e., at least until January 1, 2030.
 The Department does not agree that covered documents must be
available online indefinitely, as suggested by several commenters, but
paragraph (e)(2)(ii) of the final rule reflects the Department's
determination that covered documents must, at a minimum, be available
on the website for at least one year. Covered individuals will benefit
from having covered documents available to them for a reasonable period
of time. For example, participants in a participant-directed individual
account plan will, at any time, have access to at least a year's worth
of quarterly pension benefit statements, which may be accessed
throughout the year for a variety of reasons, including to verify
contributions, review and revise asset allocations, or otherwise manage
their retirement assets. This also provides ample time for covered
individuals who wish to print or download covered documents to do so.
 The new website retention provision in paragraph (e)(2)(ii) of the
final rule does not preclude the ability of plan administrators to
retain historical documents on the website longer than the minimum term
required, if they choose.\53\ Plan administrators may prefer to archive
or similarly preserve prior covered documents on the website for a
longer period of time than is required by paragraph (e)(2)(ii). Nor do
these new website retention requirements alter a plan administrator's
general recordkeeping requirements under ERISA. For example, ERISA
sections 107 (retention of records) and 209 (recordkeeping and
reporting requirements) separately specify retention periods.\54\ Thus,
participants may continue to request covered documents that are older
than one year. Plan terminations, benefit determinations, and many
other circumstances and events naturally will arise during, and
following, an employer's sponsorship of a pension benefit plan that
require special attention to the proper management and retention of
documents.\55\ Plan administrators' (and other plan fiduciaries')
responsibilities with respect to retaining plan records and documents
and responding to participant requests are unchanged from existing law.
The new safe harbor adopted today is not meant to alter ERISA
obligations with respect to the maintenance of plan records or
otherwise. This is an optional safe harbor available to plan
administrators that provides a new method for plan administrators to
furnish covered documents to plan participants.
---------------------------------------------------------------------------
 \53\ One commenter argued that including numerous historical
documents on the website could create unnecessary confusion. The
Department disagrees. Any such confusion should be minimal to the
extent that the current version of any covered document must be
presented on the website in a manner calculated to be understood by
the average plan participants pursuant to paragraph (e)(2)(iii) of
the final rule. A covered document that is buried or obscured on the
website is not, in the Department's view, presented on the website
in a manner that satisfies this standard.
 \54\ 29 U.S.C. 1027, 1059.
 \55\ As one commenter pointed out, maintaining historical
versions of covered documents not only is necessary for plan
administrators to satisfy their ERISA recordkeeping obligations and
this final rule, but may be in plan sponsors' own interest to the
extent they wish to rely on such covered documents in later
litigation or enforcement matters.
---------------------------------------------------------------------------
 Some commenters asked the Department to include standards for the
design of the website, such as requiring that information be presented
in a simple and direct form, and that the rule should prevent covered
individuals from having to click through various levels to find
documents. The Department disagrees that any changes to the rule are
necessary to manage these concerns. The rule already requires, in
paragraph (e)(2)(iii), that covered documents must be presented on the
website in a manner calculated to be understood by the average plan
participant. Further, the rule requires, in paragraph (d)(3)(i)(D),
that a website address or hyperlink must be ``sufficiently specific''
to provide ready access to a covered document. A link that requires a
covered individual to click through an unreasonable number of web pages
to find a covered document would not satisfy the standard. The
Department also believes that plan administrators and their service
providers, rather than the Department, are better equipped to address
the technicalities involved in designing websites to disclose required
information.
 Paragraph (e)(3) of the proposal required that the plan
administrator take measures reasonably calculated to ensure that the
website protects the confidentiality of personal information that could
be included in covered documents. The Department explained that given
the industry's increasing reliance on and use of electronic technology,
many plans already have secure systems in place to protect covered
individuals' personal information, as is generally required by section
404 of ERISA. The Department requested comments on whether this
standard is sufficient to protect covered individuals' personally
identifiable information. Commenters disagreed on the sufficiency of
this standard. Some commenters asserted that the proposal adequately
addressed information privacy and security concerns and that the
approach taken in the proposal, which included a principles-based
standard, is preferable to specific standards, requirements, and
certifications, which can quickly become obsolete with rapidly-changing
technology. Other commenters do not believe the Department sufficiently
addressed privacy concerns in the proposal, especially for inactive or
unused electronic addresses, which, in the view of some commenters, are
likely to result for participants who are
[[Page 31898]]
assigned an electronic address by their employer. These commenters
suggested that the more devices on which the Department allows
electronic delivery of information, the more complex security issues
become, and that security requirements may need to vary from covered
document to covered document.
 The Department in the final rule has maintained the principles-
based standard included in the proposal, agreeing with commenters that
efforts to establish specific, technical requirements would be
difficult to achieve, given the variety of technologies, software, and
data used in the retirement plan marketplace. The commenters requesting
more specific standards themselves point to this difficulty, insofar as
these issues become more complex as innovations occur and the same
standards may not be appropriate for all covered documents, all
systems, or in all circumstances. Therefore, the final rule continues
to require that the plan administrator, possibly in coordination with
plan service providers, take measures reasonably calculated to protect
the security and privacy of covered individuals' information.\56\
---------------------------------------------------------------------------
 \56\ Some commenters raised issues regarding liability for
security breaches. This safe harbor only establishes an optional
method for delivery of covered documents. Issues pertaining to
liability for security breaches are beyond the scope of this safe
harbor.
---------------------------------------------------------------------------
 Paragraph (e)(4) of the final rule is new. It was added in response
to a range of questions from commenters about what constitutes a
``website'' for purposes of the safe harbor. In the preamble to the
proposed rule, the Department explicitly asked for commenters' views on
whether, and how, the rule should be modified to include other web-
based mechanisms, such as messaging and mobile ``apps.'' Although some
commenters recommended a narrow application of the rule to traditional
websites accessed with a browser, most commenters on this issue
encouraged the Department to broadly define what constitutes a website,
or at least to clarify that the term covers any appropriate electronic
source for accessing information. These commenters want to ensure that
the rule accommodates advances in technology and permits the use of
mobile applications, texting, and other internet-based mechanisms and,
in some cases, these commenters suggested specific language for the
rule or that the Department adopt a good faith or similar standard in
the rule to allow plan administrators to use new technology without
having to revisit the regulatory process. The Department agrees that
the rule should more clearly state its inclusion of additional and new
technologies, as long as those technologies are not inconsistent with a
plan administrator's ability to satisfy the requirements of the safe
harbor. The Department does not want to inhibit innovation in the
delivery of required ERISA disclosures, especially as forms of
communication improve and expand. Thus, for purposes of the safe
harbor, the term ``website'' means an internet website, or other
internet or electronic-based information repository, such as a mobile
application, to which covered individuals have been provided reasonable
access.
(4) Right to Copies of Paper Documents or To Globally Opt Out of
Electronic Delivery
 The Department believes that it is essential that any enhanced use
of electronic disclosure permitted under ERISA respects the preferences
of covered individuals who want to receive covered documents on paper,
mailed or delivered to them. To that end, the proposal contained two
safeguards, in paragraph (f), for these covered individuals.
 The first safeguard, in paragraph (f)(1) of the proposal, provided
that upon request from a covered individual, the plan administrator
must promptly furnish to such individual, free of charge, a paper copy
of a covered document. Commenters overwhelmingly supported protecting
covered individuals' rights to request a free paper copy of a required
ERISA disclosure. A few commenters focused on the number of paper
copies a covered individual could request, and receive, free of charge.
These commenters were concerned about potentially abusive practices in
which a covered individual makes several requests for different covered
documents. The Department is not persuaded that this is a legitimate
concern. The 2002 safe harbor permits paper copies, free of charge, and
the Department is unaware of abusive practices of this nature. The
final rule allows covered individuals to request more than one covered
document pursuant to this provision. For instance, a participant could
contact the plan administrator for a participant-directed individual
account plan and request paper copies of the plan's comparative
investment chart required by 29 CFR 2550.404a-5(d)(2) as well as a copy
of the participant's most recent quarterly pension benefit statement.
In response to commenters concerns about repeated requests for the same
version of the covered document, however, paragraph (f)(1) of the final
rule clarifies that only one paper copy of any specific covered
document must be provided free of charge under this safe harbor. Beyond
that, whether the plan charges for additional copies of the same
covered document depends on the terms of the particular plan and other
applicable provisions of ERISA and regulations thereunder, and is
outside the scope of this regulation.
 A few commenters focused on how quickly plan administrators must
respond to requests under the safe harbor. Some suggested time limits
for responses, like those adopted by the SEC for shareholder reports,
i.e., within three business days.\57\ The Department is not persuaded
that strict time limits are needed. The 2002 safe harbor does not
contain time limits for responses and the Department is unaware of harm
or exploitation in this area. The safe harbor requirement to respond to
requests rests with the ERISA plan administrator. The Department
expects that the plan administrator will furnish the copy to the
covered individual as soon as reasonably practicable after receiving
the request. This overarching standard of reasonableness is sufficient
to protect covered individuals' right to paper. The statute itself also
provides a civil enforcement remedy, when appropriate.\58\
---------------------------------------------------------------------------
 \57\ 17 CFR 270.30e-3(e).
 \58\ 29 U.S.C. 1132(c)(1).
---------------------------------------------------------------------------
 The second safeguard, in paragraph (f)(2) of the proposal, provided
covered individuals with the right to opt out of electronic delivery
and receive some or all covered documents in paper form. Commenters
overwhelmingly supported this provision and, thus, it was adopted with
only two minor changes. As proposed, this provision allowed covered
individuals to ``globally'' opt out, in the sense that individuals
would be able to opt out of electronic delivery entirely. In addition,
the provision granted covered individuals the right to opt out of
electronic delivery on a document-by-document, [agrave] la carte basis.
Commenters universally supported the right of covered individuals to
globally opt out of electronic delivery. Many commenters, however,
objected to requiring plan administrators to offer a document-by-
document opt-out right. Current recordkeeping systems, they explained,
generally apply an ``all or nothing'' approach to paper versus
electronic delivery. An [agrave] la carte system, by contrast, would
require difficult and costly system modifications to keep track of
paper preferences on a document-by-document basis for each covered
individual. Commenters
[[Page 31899]]
explained that it is highly atypical for plan administrators to offer a
``pick-and-choose'' approach to opting out of electronic delivery. It
would be rather cumbersome and complicated for plan administrators to
track opt-outs participant-by-participant, and document-by-document,
over time, they added. In addition, the fact that the rule permits plan
administrators to provide a combined annual NOIA for multiple covered
documents would exacerbate this problem, and potentially create
confusion for covered individuals. For example, the commenters question
whether an NOIA would have to include an explanation that a covered
individual can opt out for one, more than one, or all of the combined
covered documents and a detailed explanation of how to do so for each
possible opt-out variation. Commenters also pointed out that even if
the rule were limited to a global opt out, covered individuals under
the rule always may request a paper copy of any specific covered
document. Thus, according to these commenters, accommodating an
[agrave] la carte opt-out right would be burdensome and result in costs
that could deter plan administrators from using the safe harbor. At
least one comment letter can be interpreted as support for requiring
plan administrators to offer a document-by-document opt out right, in
that it identifies practices showing that some participants might
prefer a combination of paper and electronic communications.
 The Department is persuaded that the critical protection for
covered individuals is the right to globally opt out of electronic
delivery. Therefore, the final rule strikes the phrase ``some or all''
from paragraph (f)(2), retaining (and making clearer by adding the term
``globally'') only the global opt-out as a requirement. This global
opt-out requirement in paragraph (f)(2) of the final rule is the
minimum; plan administrators may offer additional opt-out election
options, such as a document-by-document opt out or one based on
categories or classifications of covered documents. For example, some
participants might be comfortable knowing that certain documents, such
as the SPD, are available on the website, but prefer to receive paper
versions of other documents, such as their quarterly pension benefit
statements. This provision also was revised to include the words ``free
of charge,'' clarifying that covered individuals may not be charged an
opt-out fee.
 Paragraph (f)(3) of the proposal required that the plan
administrator establish and maintain reasonable procedures governing
requests or elections under paragraphs (f)(1) and (2) of the safe
harbor. This provision also provided that the procedures are not
reasonable if they contain any provision, or are administered in a way,
that unduly inhibits or hampers the initiation or processing of a
request or election. This paragraph is adopted without change in the
final rule, although a few commenters raised concerns with this
provision.
 The principal concerns related to the provision's lack of
specificity, lack of prescriptiveness, and level of discretion afforded
plan administrators. These commenters were worried that the provision
would not adequately protect covered individuals who prefer paper
documents, either because plan administrators would establish onerous
procedures designed to frustrate requests or because covered
individuals would find it difficult to follow such procedures. The
suggested solution, according to these commenters, would be the
establishment of required, uniform procedures for all plans. Ideas for
elements of such procedures included, among other things, mandatory
written procedures for tracking opt-outs; and a requirement that plan
administrators permit covered individuals to submit opt-out elections
either electronically or in writing.
 These ideas may be perfectly reasonable with respect to certain
plans, and the Department does not wish to discourage the establishment
of such procedures under this safe harbor. The Department does not
believe, however, that it is appropriate to set forth a single set of
procedures to govern all requests or elections for all plans, in all
circumstances. The general, principle-based approach in paragraph
(f)(3) of the final rule provides stringent and protective guardrails
to protect covered individuals' rights, while avoiding the pitfalls of
adopting strict one-size-fits-all procedural requirements that must be
applied by all plans in all circumstances, and that might inhibit
innovation in the implementation of this notice-and-access framework.
Finally, the Department finds unpersuasive the assertions that some
covered individuals may be unaware of their plan's procedures for
making requests or elections. Paragraph (g) of the final rule,
discussed in more detail below, requires these procedures to be set out
in writing in an initial paper notice to all individuals to whom the
plan administrator intends the safe harbor to apply, before the safe
harbor can be used.
 A couple of commenters also asked for confirmation that paragraph
(f)(3) of the safe harbor does not preclude plan administrators from
continuing to make online information available to covered individuals
who globally opt out of electronic delivery under the safe harbor. One
commenter, for example, noted that some plan administrators may post
covered documents online and continue to send NOIAs to covered
individuals that have decided to opt out of electronic delivery. The
safe harbor provides plan administrators with an optional method of
furnishing covered documents through electronic media, and paragraph
(f)(3) provides a mechanism for individuals to override a plan's
decision and select paper delivery. When an individual makes an
election under paragraph (f)(2) of the safe harbor, the plan
administrator must return that individual to paper delivery, at which
point the conditions of the safe harbor no longer apply with respect to
that individual. Once a plan respects the individual's election and
satisfies its obligation to furnish paper documents, the plan may
continue to provide online access to covered documents that are
available as well. The safe harbor has no effect on optional action in
this context by plan administrators.
 Finally, paragraph (f)(4) of the proposal is adopted in the final
rule with one minor change for clarification. This paragraph requires
that the system for furnishing the NOIA must be designed to alert the
plan administrator of an invalid or inoperable electronic address. If a
plan administrator learns of an invalid or inoperable electronic
address (e.g., the email is returned as undeliverable or ``bounces
back'' and the problem is not promptly cured), the plan administrator
must treat the covered individual as if he or she had elected to opt
out of electronic delivery under paragraph (f)(2). One way to cure the
problem would be to furnish the NOIA to a valid and operable secondary
electronic address that had been provided by the covered individual
when alerted of the invalidity or inoperability of the primary
electronic address. Another way to cure the problem would be to
promptly obtain a new electronic address for the covered individual.
Some commenters offered additional remedies for promptly curing an
invalid electronic address. The Department agrees that other acceptable
cures exist depending on the particular facts and circumstances
surrounding an NOIA that cannot be delivered. Regardless of the
procedures that a plan administrator implements to cure an invalid
electronic address, if the problem is not promptly cured, the deemed
election of paper delivery will
[[Page 31900]]
persist until the plan administrator is able to obtain a valid and
operable electronic address for the covered individual.
 Paragraph (f)(4) is solely a safeguard to ensure that covered
individuals actually receive their pension plan disclosures by
requiring different treatment of a covered individual when his or her
electronic address is invalid or inoperable. As long as the plan
administrator is not alerted to such a problem, and the other
conditions of the safe harbor are satisfied, the plan administrator is
considered to have furnished the covered documents required under Title
I of ERISA. This provision does not address issues such as whether a
covered individual read, understood, or had actual knowledge of the
contents of the covered documents accessed.\59\ Nor does this provision
impose an affirmative obligation on the plan administrator to monitor
whether covered individuals visit the specified website or login at the
website.
---------------------------------------------------------------------------
 \59\ See Intel Corp. Inv. Policy Cmte. v. Sulyma, 140 S. Ct. 768
(2020).
---------------------------------------------------------------------------
 Some commenters recommended that paragraph (f)(4) should include
additional safeguards, such as a requirement that plan administrators
monitor, using electronic tracking tools, whether covered individuals
actually receive, open, read, or access online the NOIA or covered
documents. These commenters argued that without a monitoring
requirement, NOIAs could end up in a spam folder or be buried or
otherwise misfiled, resulting in a covered individual never actually
accessing a covered document online. A few commenters questioned
whether application of the safe harbor would adequately result in
covered documents actually being received and whether the conditions of
this rule are sufficient to satisfy the general standard for furnishing
documents under ERISA.
 Other commenters strongly opposed the imposition of tracking or
monitoring obligations on plan administrators. These commenters did not
necessarily challenge the existence of tracking or monitoring
technology to learn about participants' electronic engagement; indeed
some commenters pointed to tracking capabilities when citing the
benefits of electronic delivery, possibly even correlating to higher
deferral rates. Rather, these commenters opposed a tracking or
monitoring obligation on the grounds of economic burdens. One
commenter, for example, stated that ``requiring employers to ensure
that a required document is received and read--when this has not been
required for paper documents--would surely substantially increase cost,
time and liability for plan fiduciaries.'' In support of this position,
they maintained that the safeguards in paragraph (f)(4) of the proposal
are reasonably crafted and sufficient to resolve potential electronic
delivery failures, and that any additional obligations would be
unnecessary and unsupported from a cost-benefit perspective. These
commenters also opposed a tracking or monitoring obligation on policy
grounds, arguing that it would be inconsistent for the Department to
impose a tracking or monitoring requirement on plan administrators
using electronic delivery when they currently are unable to determine
if individuals open and read paper disclosures sent by U.S. mail. In
this regard, they asserted that it would be poor and inconsistent
policy to regulate electronic delivery more stringently than
traditional paper delivery methods.
 The Department disagrees that compliance with this final rule,
which includes a variety of protections and safeguards for covered
individuals, in addition to this paragraph (f)(4), fails to satisfy
ERISA's standard for delivery. The Department does agree, however, that
imposition of a monitoring requirement could be very expensive,
especially for small plans, to the extent technological systems have to
be replaced or altered significantly, or additional, potentially
costly, plan services have to be procured. Even the most basic
requirement for website monitoring, for example tracking the instances
of users visiting a particular page on a website or views of a screen
on an app, would require a web analytics tool, according to the
commenters. Even for plan administrators that already, as suggested by
a few commenters, engage in some level of monitoring, transitioning
their systems and procedures to comply with a specific, technical
requirement in this safe harbor would not be without some burden and
cost. It is unlikely in all cases that the capabilities or functioning
of existing monitoring systems would align precisely with a new
regulatory requirement. Further, the Department believes that the
rule's protections for covered individuals, not only paragraph (f)(4)
but, for example, the clear and timely communication of website
activity and paper and opt-out rights to preserve individuals' delivery
preferences, taken together, provide a method of furnishing documents
that is more than reasonably calculated to ensure actual receipt of
covered documents. Thus, the Department does not see a compelling
reason to establish a stricter standard for monitoring covered
individuals' use of disclosures furnished electronically than for paper
deliveries. The practical effect of paragraph (f)(4) of the final rule
is analogous to the circumstances that arise when a plan is alerted to
an invalid physical mailing address when a letter is returned as
undeliverable. Of course, this final rule does not prevent plan
administrators who already engage in some level of monitoring from
continuing to do so.
(5) Initial Notification of Default Electronic Delivery and Right To
Opt Out
 Paragraph (g) of the proposal provided that the plan administrator
must furnish to each individual, prior to the plan administrator's
reliance on this section with respect to such individual, a
notification on paper that some or all covered documents will be
furnished electronically to an electronic address, a statement of the
right to request and obtain a paper version of a covered document, free
of charge, and of the right to opt out of receiving covered documents
electronically, and an explanation of how to exercise these rights.
 The Department is adopting paragraph (g) with a few modifications
in response to commenters' suggestions, which are explained below. The
final rule continues to require that each individual with respect to
whom a plan administrator intends to rely on the new safe harbor, be
furnished a notification, on paper, that some or all of the plan's
covered documents will be furnished electronically to an electronic
address. The initial notice, as proposed, also required a statement of
the right to request and obtain a paper version of covered documents
and of the right to opt out of receiving covered documents
electronically, free of charge, and an explanation of how to exercise
these rights. The Department continues to believe that it is important
for all participants and beneficiaries, who are accustomed to the
current ERISA delivery rules, to be notified, on paper, that the plan
administrator is adopting a new method of electronic delivery. If the
plan administrator does not intend to rely on this new safe harbor for
one or more employees, however, the plan administrator does not need to
send these employees an initial notification. To illustrate, assume
that an existing defined contribution plan covers three participants,
only one of whom is covered under the 2002 safe harbor as an employee
who is ``wired at work.'' This plan could take advantage of the new
safe harbor for all three
[[Page 31901]]
participants, in which case each participant would have to be furnished
the initial notification, even the employee who is ``wired at work.''
Alternatively, this plan could take advantage of this safe harbor only
with respect to the two participants who are not covered under the 2002
safe harbor, in which case the plan would furnish the initial
notification only to these two participants.
 Many commenters requested an exception to the requirement that the
initial notice must be furnished on paper for individuals who already
receive disclosures electronically under the 2002 safe harbor.
Commenters were concerned that, in this context, participants and
beneficiaries who are accustomed to receiving electronic disclosures
may be confused by a paper notice, or might ignore it altogether. Some
of these commenters suggested that individuals covered by the 2002 safe
harbor should not be required to receive an initial notice at all. On
the other hand, the Department received comments supporting the
requirement that an initial notice must be furnished on paper to all
intended covered individuals, without exception. The Department
believes that commenters' concern about potential confusion on the part
of individuals receiving an initial notice is speculative at best.
Further, even if an individual has been receiving electronic
disclosures pursuant to the 2002 safe harbor, the logistics of
electronic disclosure likely will work differently under the new safe
harbor, for example with respect to the right to globally opt out.
Therefore, the Department continues to believe that application of this
new safe harbor warrants an initial notification, in paper, advising
participants at the outset how covered documents will be furnished and
their rights under the new electronic delivery framework and that
confusion or other harm is highly unlikely. To that end, a plan
administrator may not rely on the 2002 safe harbor to furnish the
initial notice electronically to any participant or beneficiary that
will be a covered individual under the new safe harbor.
 A few commenters questioned the sufficiency of providing only one
initial notice to warn participants and beneficiaries about the
transition from paper to electronic delivery. Commenters made various
suggestions, including that the Department require plan administrators
to send two such notices before relying on the safe harbor, and that
additional notices should be provided annually and at termination of
employment. The Department declines to adopt these suggestions. These
commenters offered no basis to conclude additional paper notices would
be significantly more effective, particularly in light of the
additional costs such a requirement would entail. In addition, the
Department notes that the initial notice is not the only protection for
participants and beneficiaries who will be transitioned to notice-and-
access electronic disclosure. The specific purpose of the initial
notice is to alert covered individuals to the coming change and of
their rights under the new disclosure framework. Covered individuals,
however, will continue to be informed of these rights in all future
NOIAs. The Department drafted this safe harbor mindful of important
periods of transition for covered individuals, not only requiring an
initial notice before electronic delivery begins for a particular
individual, but also requiring all future NOIAs thereafter to contain
similar information, and a special rule to address the time at which
covered individuals sever from employment.
 Although a number of commenters supported the proposed content
requirements, without modification, other commenters recommended a
variety of additional content requirements for the initial notice
required under paragraph (g) of the proposal. For example, commenters
suggested that it would benefit covered individuals if the initial
notice included instructions for how to access covered documents and
the electronic address that will be used to furnish NOIAs under the
safe harbor. Commenters point out that a covered individual's
electronic address plays a crucial role under the new safe harbor,
especially with respect to situations in which the employer will assign
an electronic address (and here, especially if an employer assigned a
commercial electronic address, such as a Google email account (or
``gmail.com'')). Additional suggestions for required content included a
list of disclosures the plan intends to provide electronically, a
statement that individuals who request paper will be protected from
retaliation, the right of individuals to print covered documents at the
employer's office, and a toll-free number to contact the plan for
password and other assistance.
 Although the Department disagrees with the appropriateness and
necessity of each item on the broad list of additions offered by these
commenters, the Department was persuaded by commenters that the initial
notification could be improved, and the transition to electronic
delivery made smoother, by requiring certain additional items of
information. First, the final rule now provides, in paragraph (g), that
plan administrators identify the electronic address that will be used
for a particular individual and any instructions necessary to access
the covered documents. The Department agrees that it would be helpful
for a plan administrator to identify the specific electronic address
that will be used to furnish covered documents to a covered individual
and that the additional burden, if any, of including this personalized
information will be more than offset by the benefit to both the plan
administrator and covered individuals of stating, up front, the
electronic address that will be used. This requirement will help to
identify and rectify potential mistakes for an individual's preferred
electronic address and to clearly identify electronic addresses
assigned by the employer. Second, the Department agrees that
individuals will benefit from the inclusion of any instructions that
will be necessary to access covered documents, for example whether
individuals will have to use passwords, download a mobile application,
or set up an online account to view secure documents. Third, the
Department added to the final rule a requirement that the initial
notice include a cautionary statement that the covered document is not
required to be available on the website for more than one year; or, if
applicable, after it is superseded by a subsequent version of the
covered document. This addition is to make sure that covered
individuals are put on notice as they transition to a notice-and-access
disclosure framework that covered documents may not be available online
indefinitely.
 The Department did not adopt, as requirements, any of the other
content suggested by commenters; the Department notes, however, that
the content requirements for initial notices in the final rule, unlike
for NOIAs, are not limiting. As long as additional content on the
initial notice is relevant and not inaccurate or misleading, plan
administrators may personalize and further enhance the initial notice
to better communicate the plan's transition to electronic disclosure
under the safe harbor. Finally, the Department added one additional,
non-content, requirement to paragraph (g), that the initial notice must
be written in a manner calculated to be understood by the average plan
participant; this change is intended merely to confirm that the initial
notice must satisfy the same general readability standard as the NOIA
and other required ERISA disclosures.
[[Page 31902]]
 One commenter raised an issue with respect to the prominence of the
initial notification required by paragraph (g) of the proposal. This
commenter was concerned that initial notifications might be packaged or
combined with other disclosures, including non-ERISA employment
materials, distributed during the onboarding process and that newly
hired individuals might lose track of them. This commenter requested
that the final rule include a requirement that an initial notice be
furnished alone and not, for example, with enrollment or other
materials. Others disagreed with this commenter and believed that
initial notices should be contained in plan enrollment materials, or
for instance in a new employee packet or with other onboarding human
resource documents. The Department understands the concerns of the
former commenter, but believes it may be impractical to mandate that
the initial notice be furnished alone. The Department agrees with the
latter commenter that it makes common sense for plan administrators to
distribute initial notices with standard enrollment materials. It is
customary for plan administrators to consolidate or package different
documents or disclosures into a single enrollment package for
organizational purposes and for the sake of efficiency. The requirement
in paragraph (g) that the initial notification be in writing is
sufficient protection against the possibility that covered individuals
will overlook such notices. Accordingly, no change to paragraph (g) of
the proposal is made in response to this comment.
(6) Special Rule for Severance From Employment With Plan Sponsor
 Paragraph (h) of the final rule continues, as proposed, to include
a special requirement for plan administrators who wish to use the safe
harbor for furnishing ERISA pension plan disclosures to employees who
have severed from employment.\60\ As explained in the proposal, this
special rule focuses on circumstances when there is a heightened
concern about the accuracy of electronic contact information in
connection with an employee's severance from employment. As proposed,
paragraph (h) provided that, at the time a covered individual who is an
employee severs from employment with the employer, the plan
administrator must take measures reasonably calculated to ensure the
continued accuracy of the electronic address described in paragraph (b)
of the rule or to obtain a new electronic address that enables receipt
of covered documents following the employee's severance from service.
---------------------------------------------------------------------------
 \60\ As explained in the preamble to the proposal, the phrase
``severance from employment'' in paragraph (h) is intended to have
its ordinary meaning. A severance from employment occurs when an
employee dies, retires, is dismissed, or otherwise terminates
employment with the employer that maintains the plan, including when
the employee continues on the same job for a different employer as a
result of a liquidation, merger, consolidation or other similar
corporate transaction. Whether a severance from employment has
occurred is determined based on the facts and circumstances of the
particular situation.
---------------------------------------------------------------------------
 Many commenters suggested eliminating this provision in its
entirety, arguing that it is unnecessary and duplicative, because
paragraph (f) of the proposal, which required a plan administrator to
take curative steps if the electronic address of a covered individual
becomes invalid or inoperable (i.e., the ``bounce back'' provision)
will remedy problems with electronic addresses of former employees. The
Department intends to ensure a seamless transition for the
dissemination of ERISA pension plan information when an employee leaves
employment. And as such, the Department disagrees that paragraph (f)
will address every circumstance in which an electronic address becomes
inoperable or no longer associated with a covered employee who severs
from employment. For example, emails sent to employer-provided email
addresses of employees who have severed employment will not necessarily
bounce back in a timely fashion, or ever, as would be necessary to give
the plan administrator time to furnish documents within applicable
timeframes. As a result, the Department is retaining the ``severance
from employment'' rule, subject to a few revisions.
 Other commenters recommended limiting the rule to severing
employees who are receiving covered documents through an employer-
provided electronic address, not a personal electronic address. These
commenters argued that a special provision for severance is necessary
only for employees who have an employer-assigned electronic address. If
the electronic address being used by a terminated employee is not one
that has been assigned by their employer, these commenters argued,
there is no obvious reason that the address would cease to be valid or
used by the individual merely because of cessation of employment. That
is not the case with employer-provided addresses, which are likely to
cease working at termination of employment or at some point thereafter,
either because the employer deletes the email account or the severing
employee no longer uses or has access to the employer-provided email
account. The Department agrees that the special severance provision is
not necessary when a personal electronic address is being used to
provide covered documents to a covered individual. Therefore, the
Department has revised paragraph (h) to read as follows: ``At the time
a covered individual who is an employee, and for whom an electronic
address assigned by an employer pursuant to paragraph (b) of this
section is used to furnish covered documents, severs from employment
with the employer, the plan administrator must take measures reasonably
calculated to ensure the continued accuracy and availability of such
electronic address or to obtain a new electronic address that enables
receipt of covered documents following the individual's severance from
employment.''
 This revision also addresses concerns raised by representatives of
multiemployer plans. These representatives stated that the Department
should adjust paragraph (h) to better reflect and accommodate the
experiences of individuals covered by a multiemployer plan, who may
work for multiple different employers in the same year, if not the same
month. These representatives also stated that it is not typically the
case that employees are provided email addresses through their
employers in the multiemployer sector and that those multiemployer
plans who do deliver notices electronically, do not typically use
employer-provided emails. Thus, this revision in practice will usually
exclude plan administrators of multiemployer plans from the
requirements of paragraph (h) of the final rule.
 The special rule for ``severance from employment'' requires a plan
administrator to take measures reasonably calculated to ensure the
continued accuracy of the electronic address following a severance from
employment, or to obtain a new address that enables receipt of covered
documents following the severance. Many commenters requested
clarification on what types of procedures would constitute such
reasonable measures. One commenter suggested that the Department should
require plan administrators to furnish, on paper, an additional, post-
termination notice, with content similar to the NOIA. Covered
individuals terminating their employment should already be familiar
with their plan's notice-and-access framework for delivery, so the
Department disagrees that the rule should include an additional notice
requirement at termination. Requiring another notice,
[[Page 31903]]
especially in paper form, would increase the costs of compliance with
the safe harbor overall, and, in the Department's view, unnecessarily.
Employees separating from service are sufficiently protected under this
provision to the extent the rule requires plan administrators to have
procedures in place to ensure they have a correct electronic address to
which notices will be furnished. As an example, procedures that include
requesting and receiving an updated personal email address for future
notifications as part of a company's standard off-boarding process
ordinarily would be sufficient to meet this standard. If these measures
fail, the participant or beneficiary is no longer a ``covered
individual'' under paragraph (b) of the final rule.
(7) Special Rule for Annual Combined Notices of Internet Availability
 Although the proposal generally required, in paragraph (d)(1), that
a plan administrator furnish an NOIA for each covered document, a
special rule in paragraph (i) of the proposal allowed a plan
administrator to furnish one annual combined NOIA (combined NOIA),
subject to the timing requirements in paragraph (d)(2), that
incorporates or combines the content required by paragraph (d)(3) with
respect to one or more of a subset of covered documents. These
documents included, as applicable (1) a SPD; (2) a SMM; (3) a summary
annual report (SAR); (4) an annual funding notice; (5) an investment-
related disclosure under 29 CFR 2550.404a-5(d); (6) a QDIA notice; and
(7) a pension benefit statement. The Department proposed a special rule
for these covered documents because they represent the most common and
recurring disclosures that are made to pension plan participants, and
are triggered by no event other than the passage of time.\61\
---------------------------------------------------------------------------
 \61\ The proposal included the SMM even though it does not
technically fit under the passage-of-time descriptor. An SMM's
timing requirement sets it apart from, and warrants different
treatment than, other event-triggering disclosures, the timing for
which more closely corresponds to the particular event. See 29 CFR
2520.104b-3(a) (requiring the plan administrator to furnish the SMM
``not later than 210 days after the close of the plan year in which
the modification or change was adopted''). In response to negative
commentary on its inclusion in this paragraph, the SMM is excluded
from the special rule in paragraph (i) of the final rule. Despite
this exclusion, the SMM remains a covered document and may be
furnished under the safe harbor, but it must have its own NOIA.
---------------------------------------------------------------------------
 The Department excluded other required ERISA disclosures from this
special rule, because, for example, they are event-specific disclosures
and might communicate information that requires or invites specific and
timely action on behalf of a participant or beneficiary. The special
rule excluded contingent or irregular documents that are furnished
based on an individual transaction or plan-status basis, or that are
not regularly furnished to participants and beneficiaries. For example,
a participant who receives notice of a blackout period, as required by
ERISA section 101(i), may consider changing their investment directions
and, if so, must do so within the timeline specified. Similarly, a
participant who receives notice of an adverse benefit claim
determination, as required by ERISA section 503(1), may wish to appeal
or take other action following such determination, in which case they
similarly must act within defined periods of time. In either example,
the timing of the annual combined NOIA may not align with, and may even
post date, the timing of the specific act required or invited by the
covered document. Additional examples include a qualified domestic
relations order determination under ERISA section 206(d)(3)(G)(i)(II),
and a notice of failure to meet minimum funding standards under ERISA
section 101(d).
 In short, the Department excluded documents that it believes do not
lend themselves, primarily because of their timing, irregularity, or
requirement of potentially timely action by a covered individual, to a
framework that permits combination into one annual NOIA. The Department
solicited comments on whether, and why, the subset of covered documents
eligible for paragraph (i) should be expanded or narrowed, and the
criteria that would justify an expansion or narrowing. In addition, the
Department asked for commenters' views on whether, instead of an
explicit list of the covered documents to which paragraph (i) applies,
any final safe harbor should adopt a principles-based or categorical
approach, describing the type or nature of covered documents that may
be combined.
 Paragraph (d)(2), as proposed, required that a combined NOIA for
more than one covered document under paragraph (i) be furnished at
least once each plan year, and, if the combined NOIA was used for the
prior plan year, no more than 14 months following the prior year's
notice. The Department intended this combined NOIA to be an annual
disclosure; to provide flexibility to plan administrators and avoid
potential compliance issues associated with a strict 12-month standard,
however, the proposal provided that an ``annual'' combined NOIA may be
furnished up to 14 months following the prior ``annual'' combined NOIA.
Commenters did not object to the timing standard for this notice, and
paragraph (d)(2) has been adopted as proposed to provide for this
``annual'' combined NOIA.
 The special rule in paragraph (i) of the proposal elicited a large
number of comments. Some of the commenters opposed paragraph (i) and
argued that permitting consolidation is insufficient because it fails
to provide notice to participants about important documents that are
due at different times. Without an NOIA each time a document is posted
online, these commenters worry that covered individuals will have no
reason to go to the website. One commenter pointed out that the very
documents that may be consolidated are the documents that are most
critical to covered individuals understanding their most basic
retirement plan rights and benefits. Another commenter asserted that
this concern is heightened for covered individuals in a participant-
directed individual account plan who would receive only one notice per
year that covers all four of their quarterly pension benefit
statements. This commenter argued that this framework may not, as a
legal matter, constitute adequate ``furnishing'' of the quarterly
pension benefit statements. Further, since the cost of sending an NOIA
by email, for example, is or should be insignificant, argued one
commenter, plans will realize very little savings under the proposed
special rule.
 Other commenters, however, not only supported the consolidation of
notices permitted by paragraph (i) of the proposal, but in some cases
requested that the Department expand the consolidation permitted for
the final rule to include additional disclosures. Commenters offered a
variety of suggestions, including any information that must be
furnished annually (e.g., the general plan information required by
paragraph (c) of the Department's 404a-5 participant-level fee
disclosure regulation \62\) or any covered documents that would be
furnished at the same time, such as disclosures based on plan
events.\63\ Several commenters also
[[Page 31904]]
requested inclusion of specified plan-related notices required by the
Internal Revenue Code, such as the Code automatic contribution
arrangement notices that currently may be furnished with the
Department's QDIA notice.\64\
---------------------------------------------------------------------------
 \62\ 29 CFR 2550.404a-5, ``Fiduciary requirements for disclosure
in participant-directed individual account plans'' (Oct. 20, 2010).
 \63\ For example, one commenter suggested if a plan
administrator changes investment providers, a required blackout
notice, pursuant to 29 CFR 2520.101-3, and the disclosure of changes
to plan investment options, pursuant to 29 CFR 2550.404a-
5(c)(1)(ii), should be permitted to be announced in a combined NOIA.
The Department did not accept this suggestion. The final safe
harbor's special rule generally is intended to apply to routine
disclosures that are furnished on a regular basis and that do not
invite action in response to the disclosure. The blackout notice and
disclosure of changes to plan investment options do not satisfy
these criteria; in the Department's view these disclosures warrant
separate notice.
 \64\ See Code sections 401(k)(13)(E), 414(w)(4), and
401(k)(12)(D); see also FAB 2008-03 as to furnishing the Code
notices with the Department's QDIA notice.
---------------------------------------------------------------------------
 Other commenters responded favorably to the concept of a
principles-based category of documents that may be consolidated, beyond
the seven included in the proposal, and that might be flexible enough
to accommodate future disclosure requirements. A different commenter
argued that a principles-based standard for covered documents that may
be consolidated is not workable, because plan administrators may
interpret the language differently creating unnecessary confusion,
including for covered individuals. Commenters also disagreed on whether
plan administrators should be able to consolidate notices of more than
one plan when offered by a plan sponsor and asked for clarification on
this point. In this connection, the Department notes that the final
rule applies to ``an'' employee benefit plan, and its requirements must
be satisfied with respect to each such plan, even if sponsored by the
same employer. Allowing covered documents for more than one plan to be
included on a combined NOIA could create confusion for covered
individuals and would result in an even longer, less concise notice,
especially to the extent notices for multiple covered documents for
each plan already may be consolidated.
 Paragraph (i) of the final rule is appreciably different than the
paragraph as proposed, based on the Department's reevaluation of the
combined NOIA concept in light of commenters' many ideas and points of
view. Paragraph (i) continues to provide that plan administrators can
furnish one annual NOIA that incorporates or combines the content
required by paragraph (d)(3) of the rule with respect to more than one
document. As opposed to the proposed list of seven covered documents,
though, the group of documents for which a single annual combined NOIA
is permitted has been revised.
 As revised, paragraph (i) of the final rule permits one annual
combined NOIA that incorporates the content required by paragraph
(d)(3) with respect to four categories of documents and information.
The first category is the SPD, as required pursuant to section 104(a)
of ERISA. The second category is any covered document or information
that must be furnished annually, rather than upon the occurrence of a
particular event, and does not require action by a covered individual
by a particular deadline. The third category is any covered document,
not in the first and second categories, if authorized in writing by the
Secretary of Labor, by regulation or otherwise, in compliance with
section 110 of ERISA. The fourth category is any applicable notice
required by the Code if authorized in writing by the Secretary of the
Treasury.
 Paragraph (i)(1) of the final rule deals with the first category of
permissible documents, which consists solely of the SPD. The Department
finds that the SPD lends itself to inclusion on an annual, combined
NOIA, especially because its inclusion generally will remind covered
individuals as to its availability more often than it otherwise would
have to be furnished. Most commenters supported inclusion of this
document.
 Paragraph (i)(2) of the final rule deals with the second category
of permissible documents and information. This category includes
certain annual disclosures meeting certain conditions. Rather than
listing the covered documents, however, the final rule describes this
category as ``any covered document or information that must be
furnished annually, rather than upon the occurrence of a particular
event, and that does not require action by a covered individual by a
particular deadline.'' The NOIA for any covered document meeting this
description may be consolidated onto an annual combined NOIA. This
category includes many of the covered documents that were listed in the
proposal, for example, an SAR, an annual funding notice, a QDIA notice,
an annual (but not quarterly) pension benefit statement, and annual
investment-related information required by paragraph (d)(2) of the
Department's Sec. 2550.404a-5 regulation. In response to public
comments, this new category also includes information that must be
furnished annually to comply with paragraph (c) of the 404a-5
regulation, for example the general plan information in paragraph
(c)(1)(i) or the description of fees for plan administrative services
in paragraph (c)(2)(i)(A).
 Paragraph (i)(3) of the final rule deals with the third category of
permissible documents. This category includes any covered document ``if
authorized in writing by the Secretary of Labor, by regulation or
otherwise, in compliance with section 110 of the Act.'' This category
is intended to provide the Department with flexibility to accommodate
additional or future covered documents that do not fit in the second
category in paragraph (i)(2), but that may be beneficial to include,
for example to reduce administrative burdens on plans and improve the
effectiveness of disclosures to covered individuals.\65\
---------------------------------------------------------------------------
 \65\ Section 110 of ERISA permits the Secretary to prescribe for
pension plans alternative methods of complying with any of the
reporting and disclosure requirements if the Secretary finds that
(1) The use of the alternative method is consistent with the
purposes of Title I of ERISA, provides adequate disclosure to plan
participants and beneficiaries, and provides adequate reporting to
the Secretary; (2) application of the statutory reporting and
disclosure requirements would increase costs to the plan or impose
unreasonable administrative burdens with respect to the operation of
the plan; and (3) the application of the statutory reporting and
disclosure requirements would be adverse to the interests of plan
participants in the aggregate. Section 110 provides both procedural
and substantive requirements that the Department incorporates by
reference.
---------------------------------------------------------------------------
 The fourth category, in paragraph (i)(4) of the final rule, deals
with applicable notices required by the Internal Revenue Code if
authorized in writing by the Secretary of the Treasury. This category
was added in response to the many commenters who requested a safe
harbor that aligns with the Treasury Department's electronic media
regulation for applicable notices at 26 CFR 1.401(a)-21(c), especially
for disclosing Code automatic contribution arrangement notices and
ERISA QDIA notices.
 Unlike the proposal, the special rule no longer permits an annual
NOIA to cover quarterly benefit statements within the meaning of
section 105(a)(1)(A)(i) of ERISA. The Department was persuaded by
commenters that an annual NOIA, for example furnished on January 15 of
a given year, may be insufficient to adequately alert covered
individuals as to the availability of subsequent benefit statements
furnished later in that same year, for example, on April 15, July 15,
and October 15. That view was not unanimous among the commenters,
however, with many commenters suggesting that a single annual notice of
availability is likely a very common practice, if not the norm, for
plan administrators relying on FAB 2006-03. Given the lack of consensus
among the commenters, and the Department's concern that an annual NOIA
may not effectively promote covered individuals' access to and review
of covered documents that will not be posted until months later, it
makes sense to treat these recurring covered documents differently than
other recurring documents. Accordingly, a separate NOIA must be
furnished for each of
[[Page 31905]]
these covered documents. The Department intends, however, to give
further consideration to this issue in the future, and reserves the
ability to take action pursuant to paragraph (i)(3) of the final rule,
discussed above.
(8) Reasonable Procedures for Compliance
 The Department included a provision in the proposal to ensure that
plan administrators would not violate their disclosure obligations
under ERISA when, for a variety of reasons beyond the control of the
plan administrator, there may be temporary interruptions in the
availability of covered documents on a website. Paragraph (j) of the
proposal explained that, if certain requirements are satisfied, the
conditions of the safe harbor are also satisfied, notwithstanding the
fact that covered documents are temporarily unavailable for a period of
time in the manner required by Sec. 2520.104b-31 due to unforeseeable
events or circumstances beyond the control of the plan administrator.
The plan administrator must have reasonable procedures in place to
ensure that the covered documents are available in the manner required
by Sec. 2520.104b-31. In the event that covered documents are
temporarily unavailable, the plan administrator must take prompt action
to ensure that the documents become available in the manner required by
Sec. 2520.104b-31 as soon as practicable following the earlier of the
time at which the plan administrator knows or reasonably should know
that the documents are temporarily unavailable. Commenters generally
agreed that, by including this relief from potential liability, the
Department fairly recognized the practical reality of temporary
technical disruptions in modern times while at the same time including
sufficiently rigorous standards to make sure that, as a general matter,
important ERISA information is available to participants and
beneficiaries when they need it.
 A few commenters nonetheless made practical suggestions relating to
the circumstances under which this relief should be triggered, and for
how long the relief should be available. One commenter pointed out that
covered documents also may periodically be offline for technical
maintenance, upgrades, or similar activities to maintain or improve the
website. The Department agrees that plan administrators should not fail
the safe harbor during such times, and added the concept of ``technical
maintenance'' to paragraph (j) to address these reasonable situations
in which systems staff and other providers perform tasks necessary to
maintain and improve the website on which covered documents are posted.
These situations for the most part will be foreseeable, however, so
plan administrators should take care to ensure that resulting service
disruptions are reasonable. Another commenter suggested that the
Department include a more specific parameter for how long the documents
may be ``temporarily'' unavailable; for example, what if the problems
occur during a blackout or similarly critical timeframe? The Department
agrees that consideration should be given to facts and circumstances
surrounding failure and that covered documents may be unavailable for
only a ``reasonable'' period of time. The final rule has been modified
accordingly.
(9) Direct Delivery Via Electronic Mail
 In response to a considerable amount of commentary on the proposal,
the Department is persuaded that the proposed framework for disclosure
would be enhanced by allowing the delivery of covered documents to
covered individuals via email, with the covered document attached, in
addition to allowing plan administrators to furnish covered documents
on an internet website. As proposed, the safe harbor required that
covered documents be posted on a website; the proposal did not
specifically provide for (and its requirements did not accommodate),
for example, the furnishing of an email to a covered individual that
includes an attached PDF or similar version of a covered document.
Providing covered individuals with an email that includes an attached
covered document is, however, functionally similar to providing covered
individuals with an email that includes a website link to a covered
document. For the reasons discussed below, the Department has decided
that direct delivery will provide covered individuals with comparable
access to covered documents.
 A large number of commenters asked the Department to clarify, in
the final rule, that the safe harbor also applies to the direct
furnishing of documents in electronic form. These commenters believe
the rule would be improved if plan administrators are not limited to
sending to covered individuals an email with a website address or a
hyperlink to a covered document that is posted on a website, but
instead could also send an email to covered individuals with covered
documents in the body of or as an attachment to the email. Commenters
believe that this form of delivery is equally effective, and, for some
individuals, perhaps preferable to hyperlinks and website postings. In
fact, even commenters who generally oppose electronic disclosure as a
default, nonetheless argue that directly sending covered documents is
preferable to, and more protective than, a notice-and-access framework.
According to these commenters, direct delivery is preferable because
website access may require multiple steps (logons, passwords, opening
hyperlinks, etc.) which, in their opinion, could result in a burdensome
process that some individuals may not pursue. A significant benefit of
direct delivery is immediate access to covered documents, while
avoiding accessibility issues such as firewalls and forgotten
passwords. Further, some plan administrators also may want to provide
electronic delivery but cannot support, or have logistical concerns
with supporting, a website.
 The Department is persuaded by the broad range of commenters
supporting the direct delivery of covered documents. Therefore, the
final rule includes a new provision, in paragraph (k), which allows
plan administrators to furnish covered documents directly to covered
individuals using email, in contrast to the proposal, which permitted
emails to covered individuals with links to covered documents. As
explained below, although it is set forth in paragraph (k), the direct
delivery provision relies on cross-references to other provisions of
the final rule to ensure that it maintains the applicable requirements
and protections of the notice-and-access framework.\66\ The Department
believes that this new provision better addresses commenters' requests
for a direct delivery alternative, while ensuring that there are
sufficient safeguards and other requirements necessary for application
of the final rule when a plan administrator prefers delivery by email
of the actual covered documents (as opposed to delivery by email of
hyperlinks to a website that includes the covered documents).
---------------------------------------------------------------------------
 \66\ The final rule's website accessibility, maintenance, and
other requirements do not apply to direct delivery by email.
Paragraph (k) does, however, incorporate the relevant substantive
requirements of paragraph (d), as well as the requirements of
paragraphs (f), (g) (except the cautionary statement), and (h).
Paragraph (k)(3) also includes formatting and searchability
requirements similar to those imposed by paragraph (e). These cross-
references are discussed in greater detail in this section.
---------------------------------------------------------------------------
 Paragraph (k) provides that, notwithstanding any other provision of
the safe harbor, a plan administrator will satisfy ERISA's general
furnishing obligation by using an email address to furnish a covered
document to a covered individual provided that the
[[Page 31906]]
requirements of paragraph (k) are satisfied. Although an electronic
address for purposes of defining a ``covered individual'' in paragraph
(b) of the rule is broader, for example encompassing mobile telephone
numbers, paragraph (k) is limited to delivery to an electronic address
that is an email address. Specifically, paragraph (k)(1) requires that
the covered document be sent to a covered individual's email address no
later than the date on which the covered document must be furnished
under ERISA. Paragraph (k)(2) clarifies that, because the covered
document will be furnished directly, the plan administrator does not
need to comply with paragraph (d) and send an NOIA. Rather, the plan
administrator must send an email that (i) includes the covered document
in the body of the email or as an attachment; (ii) includes a subject
line that reads: ``Disclosure About Your Retirement Plan''; (iii)
includes the information described in paragraph (d)(3)(i)(C) if the
covered document is an attachment (identification or brief description
of the covered document), paragraph (d)(3)(i)(E) (statement of right to
paper copy of covered document), paragraph (d)(3)(i)(F) (statement of
right to opt out of electronic delivery), and paragraph (d)(3)(i)(G) (a
telephone number); and (iv) complies with paragraph (d)(4)(iv)
(relating to readability). Paragraph (k)(2) ensures that the
substantive information required by paragraph (d) is provided in a
clear manner to those covered individuals who receive disclosures
directly under paragraph (k).
 Similar to paragraph (e)'s requirements for covered documents
posted on a website, paragraph (k)(3) requires that the covered
document be (i) written in a manner reasonably calculated to be
understood by the average plan participant; (ii) presented in a widely-
available format or formats that are suitable to be read online,
printed clearly on paper, and permanently retained in electronic format
that satisfies the preceding requirements in this sentence; and (iii)
searchable electronically by number, letters, or words. Finally,
paragraph (k)(4) mandates that the plan administrator (i) take measures
reasonably calculated to protect the confidentiality of personal
information relating to the covered individual; and (ii) comply with
paragraphs (f) (relating to copies of paper documents or the right to
opt out); (g) (relating to the initial notification of default
electronic delivery), except for the cautionary statement; and (h)
(relating to severance from employment) of the rule. Administrators who
use direct email delivery pursuant to paragraph (k) are not required to
include the cautionary statement required in paragraph (g) (i.e., a
statement that the covered document is not required to be available on
the website for more than one year or, if later, after it is superseded
by a subsequent version of the covered document), because plan
administrators who use paragraph (k) are not required to maintain a
website that would retain the covered documents that are delivered
directly via email.
 The Department notes that because this method of delivery does not
require that plan administrators furnish an NOIA, the corresponding
provision of the rule in paragraph (i) does not apply either. Paragraph
(i), discussed above, allows the combination of content of certain
covered documents on one, annual NOIA. The Department anticipates that,
although the annual NOIA concept does not apply when covered documents
are delivered directly, plan administrators may wonder whether more
than one covered document can be attached to one email, especially for
annually required or other covered documents that the plan
administrator wishes to send at the same time. Plan administrators
should apply the same standard in this case that would apply if
documents were to be furnished on paper. In some cases documents must
be furnished separately, the required timing for different documents
does not align, or the content of a particular document may not be
combined with other documents. But the Department often permits plan
administrators to furnish required disclosures at the same time (e.g.,
in the same envelope, the ``envelope rule''). In that case, plan
administrators may treat the email to the covered individual as the
``envelope'' and attach more than one document, as would otherwise be
permitted.
(10) Dates; Severability
 The Department proposed in paragraph (k)(1) of the rule that the
new alternative method for disclosure through electronic media, as
finalized, would be effective 60 days following publication of a final
rule in the Federal Register. The proposal included a separate
applicability date in paragraph (k)(2), providing that the new safe
harbor would apply to employee benefit plans on the first day of the
first calendar year following the publication of the final rule in the
Federal Register. The Department requested comments on the extent to
which this applicability date should be sooner, given that the
provision is optional, or later, if necessary to safeguard plan
participants and beneficiaries from potential harm if plan
administrators rely on the safe harbor too soon.
 Nearly all commenters on this provision asked the Department to
allow plan administrators to rely on the safe harbor as soon as
possible. Further, since publication of the proposal, governments,
industries, and workers globally have had to respond to the coronavirus
disease 2019 (COVID-19) outbreak, which President Donald J. Trump
declared a National Emergency on March 13, 2020. The ability of plan
administrators to use this rule will greatly assist employers, workers,
and the retirement plan industry in managing the effects of COVID-19.
Specifically, enhanced electronic delivery will immediately alleviate
some of the current disclosure-related problems being reported by a
great many retirement plans. Many retirement plan representatives and
their service providers, for example, have indicated to the Department
that they are experiencing increased difficulties and, in some cases,
an inability to furnish ERISA disclosures in paper form. The reported
problems, which are likely to persist for the foreseeable future,
include temporary or permanent closure of printing and mailing centers,
and disruptions in paper supply chains, among others. The
infrastructure necessary to deliver information electronically in this
country, however, remains largely intact.
 Given that it is a safe harbor, and that plan administrators must
be in compliance with all requirements before relying on the safe
harbor, there is no harm, and considerable benefits, associated with
moving up the applicability date, especially for employers and plan
service providers as they work toward economic recovery from COVID-19.
To the extent reliance on the rule results in cost savings and other
benefits, the Department should not delay these benefits. Commenters on
the proposal suggested that the rule be applicable on the same day that
the final rule becomes effective: Sixty days after its publication in
the Federal Register. Only one commenter explicitly requested a delay
in the application of the safe harbor, suggesting that a more
appropriate timeline would be January 1 of the second year, rather than
the first year, following the final rule's publication.
 The Department is persuaded that there is no sound reason to delay
the anticipated benefits of this rule, especially because it is a safe
harbor, rather than a requirement, and it has
[[Page 31907]]
now been revised based on rigorous analysis and thoughtful stakeholder
input to ensure that it adequately addresses appropriate policy goals
and concerns. Therefore, the Department has aligned the effective and
applicability dates to be 60 days following today's publication in the
Federal Register. This has been done in paragraph (l)(1), rather than
paragraph (k), due to the addition of a new provision in paragraph (k).
Further, although the rule is not effective or applicable until 60 days
after its publication, the Department, as an enforcement policy, will
not take any enforcement action against a plan administrator that
relies on this safe harbor before that date. The Department's decision
to provide this non-enforcement policy supports the Federal
government's broader effort to respond to COVID-19. The Department
understands the far-reaching effects of COVID-19, and the non-
enforcement policy provides flexibility and may reduce administrative
burden on employers and pension plan service providers during this
unprecedented time.
 The final rule also includes, in paragraph (l)(2), a severability
provision, which provides that if any provision in the final rule is
found to be invalid or unenforceable by its terms, or as applied to any
person or circumstance, or stayed pending further agency action, such
provision shall be severable and the remaining portions of the rule
would remain operative and available to plan administrators. Thus, if a
federal court were to find a specific provision, for example one of the
NOIA content requirements, to be legally insufficient, then the
remaining content requirements of the NOIA would remain applicable and
in place.
(11) Changing Recordkeepers
 Several commenters representing recordkeepers and plan
administrators raised questions about whether and how certain
provisions of the final rule would apply when a plan changes its
recordkeeper, plan administrator, or both. For example, a number of
commenters asked whether the safe harbor allows a new recordkeeper to
rely on a list of electronic addresses and opt-out elections that are
transferred from the old recordkeeper, or whether the new recordkeeper
must independently solicit or verify electronic addresses and furnish
new initial notifications under paragraph (g) of the rule.
Correspondingly, would covered individuals have to resubmit an opt-out
request? Commenters also asked whether a plan's safe harbor status is
lost if there are changes in business structure (e.g., mergers,
consolidations, closings, acquisitions) of the plan sponsor, plan
administrator, or plan recordkeeper, in any case resulting in a new
recordkeeper. These commenters requested guidance on how plan
administrators and other plan fiduciaries could navigate these issues
under ERISA and maintain compliance with the new safe harbor.
 A change in recordkeeper or plan administrator is a rather common
and very fact-specific event that may raise a variety of issues under
ERISA, including record retention, fiduciary, reporting, and disclosure
issues, that are generally beyond the scope of this safe harbor
regulation, which addresses only a plan administrator's obligation
under ERISA to furnish required disclosures. This becomes apparent when
one considers that these questions apply upon a change in recordkeepers
regardless of whether the disclosures are furnished to a physical
address (in paper copy) or to an electronic address (in electronic
copy). The same ERISA fiduciary obligations that apply when changing
recordkeepers responsible for furnishing paper disclosures will apply
when changing recordkeepers responsible for furnishing electronic
disclosures. Accordingly, the Department in this document declines to
render an opinion on the impact that changing a recordkeeper or plan
administrator could have, as a general matter, on the status of a plan
under ERISA and the safe harbor. Nothing in this safe harbor, however,
prohibits a plan administrator from relying on the safe harbor in
circumstances when the plan's recordkeeper transfers accumulated lists
of electronic addresses and opt-out elections to a successor
recordkeeper. This makes sense because changing a recordkeeper would
seem to have little or no effect on the validity or operability of a
covered individual's electronic address, in much the same way that
changing recordkeepers would have no effect on a participant's physical
mailing address or other contact information. To the contrary, it is
the Department's belief that confusion to covered individuals, as well
as economic inefficiencies, are likely results if participants lose
their status as covered individuals, resulting in a return to paper
delivery, solely because of the plan's decision to change its
recordkeeper.\67\ Similarly, the Department is of the general view
that, to the extent a plan participant or beneficiary is a ``covered
individual'' who already is receiving disclosures electronically
pursuant to the safe harbor (and therefore already received an initial
notice and is accustomed to the notice-and-access delivery method
permitted by this safe harbor), a new initial notice is not necessary.
---------------------------------------------------------------------------
 \67\ The Department nonetheless cautions that, to the extent a
plan administrator changes the plan's recordkeeper based on
incompetence, negligence, or fraud on the part of the current
recordkeeper, a plan administrator (or other responsible plan
fiduciary supervising the change in recordkeeper) may, as a
fiduciary matter, have to intervene and take reasonable steps to
ensure that the transfer of all plan records (not limited to
electronic addresses and opt-out records for purposes of this safe
harbor) adheres to the duties set forth in ERISA section 404.
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(12) Transition Issues
(i) Delay in Superseding Prior Subregulatory Guidance
 Although the 2002 safe harbor remains in effect, the Department
occasionally has issued guidance in limited circumstances allowing, as
a non-enforcement policy or otherwise, the use of electronic delivery
methods other than the 2002 safe harbor. In the preamble to the
proposed rule, the Department stated that although the new safe harbor
would have no impact on the current electronic delivery rule at 29 CFR
2520.104b-1(c), the new safe harbor would, if finalized, supersede the
relevant portions of this prior interpretive guidance. Specifically,
the relevant documents are FAB 2006-03, FAB 2008-03 (Q&A 7), and
Technical Release 2011-03R (Dec. 8, 2011) (TR 2011-03R).\68\
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 \68\ 84 FR 56894, at 56900, footnote 60.
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 The Department issued FAB 2006-03 to help plan administrators
comply with amendments to ERISA's pension benefit statement
requirements made by the Pension Protection Act of 2006. In relevant
part, FAB 2006-03 provides that plan administrators may satisfy their
obligation to furnish pension benefit statements by providing
continuous access to benefit statement information through one or more
secure websites. FAB 2006-03 included a variety of conditions,
including notification to participants and beneficiaries explaining how
to access their statements online. FAB 2008-03 later provided
interpretive guidance on the Department's final QDIA regulation, which
includes an initial and annual notice requirement. The QDIA notice may
be combined with the Code's notice requirement for automatic
contribution arrangements in Code sections 401(k)(13)(E) and 414(w)(4).
This FAB 2008-03 allows plan administrators that wish to furnish QDIA
notices electronically to rely on either the Department's 2002 safe
harbor or the Treasury Department's rule at 26 CFR 1.401(a)-21(c),
relating to use of
[[Page 31908]]
electronic media. Finally, TR 2011-03R sets forth an interim
enforcement policy regarding the use of electronic media to satisfy the
disclosure requirements under 29 CFR 2550.404a-5, the participant-level
disclosure regulation. TR 2011-03R allows plan administrators to
furnish this information through electronic media (including through a
continuous access website) if participants voluntarily provide an email
address and other conditions are satisfied.
 Many commenters objected to the Department's statement that this
prior guidance would be superseded. They argued that the Department
should codify and permanently preserve the guidance to avoid
unnecessary disruptions to systems already in place in reliance on such
guidance. Further, commenters urged, if the Department is not willing
to codify and permanently preserve the guidance, then the Department
should, at a minimum, provide a transition period during which plan
administrators could continue to rely on this prior guidance, while
they adjust to the terms of the new safe harbor. A transition period
would provide more time for plan administrators and plan service
providers to make necessary systems and other changes and thereby
reduce the costs and administrative burden that would result from
having to do so immediately.
 The Department disagrees that this prior guidance should be
maintained permanently. In the interest of creating uniformity in the
delivery of ERISA disclosures electronically, the Department believes
that, rather than a piecemeal approach permitting different standards
for different documents in a variety of subregulatory documents, a
sounder approach is to require that, over time, plan administrators who
wish to disclose information electronically follow a consistent
standard. The final rule is intended to be such a standard, which,
unlike the prior guidance, benefits from the regulatory process in
which the Department engaged, including public notice and comment. The
Department is persuaded, however, that it may be unnecessarily
disruptive and costly, as well as harmful, or at least confusing, to
participants and beneficiaries, if established disclosure procedures
are suddenly invalid as of the applicability date of the final rule.
The Department agrees with commenters that a reasonable transition
period, during which plan administrators may continue to rely on prior
guidance as they make necessary system changes and acquire electronic
addresses to comply with the final rule, is appropriate. Accordingly,
for 18 months following the effective date of this final rule, plan
administrators may continue to rely on the guidance set forth above.
Thereafter, the relevant portions of such guidance are superseded.
Commenters suggested transition periods generally ranging from one to
two years. It makes sense that a transition period should be greater
than one year, because many plan and participant communication cycles
are annual; allowing one full communication cycle will enable plan
administrators to rely on their general communication cycle to solicit
electronic addresses from plan participants and beneficiaries. An 18-
month extension accommodates this cycle and adds a reasonable cushion
for unanticipated events. The Department will take no enforcement
action against plan administrators who comply with the requirements of
such guidance to satisfy their delivery obligations for the specified
disclosures during this transition period.
(ii) Electronic Addresses Obtained Prior to the Effective Date of This
Final Rule
 Some commenters raised an additional issue as to whether and how
plan administrators may use electronic addresses already in the plan's
possession before transitioning to the new safe harbor. These
commenters explained that plan administrators and sponsors in many
cases already have extensive lists of email addresses, which they have
compiled over time for various employment-related reasons and in the
normal course of business operations. These addresses most likely were
provided to the plan administrator or sponsor directly by the employee,
or assigned by the plan administrator or sponsor for employment
purposes. However, prior to this new safe harbor, plan sponsors and
administrators have had no reason, at least in the context of ERISA
disclosure requirements, to document the precise source of any
particular electronic address. Commenters were concerned that paragraph
(b) of the proposal, which required that an electronic address be
provided by the individual, would prevent plan administrators from
using such electronic addresses if they do not have records that
definitively indicate where or from whom the plan obtained the
electronic address. These commenters asked whether a plan administrator
may treat electronic addresses already obtained as having been provided
by the participant, beneficiary, or other individual entitled to
covered documents for purposes of treating such person as a covered
individual under the safe harbor, even in the absence of documentation
that such previously attained address was, in fact, provided by such
person to the employer, plan sponsor, or plan administrator.
 The requirement in paragraph (b) of the final rule is intended to
prevent plan administrators from obtaining and using unreliable
electronic addresses from sources that are too far removed from the
covered individual. The Department nonetheless appreciates the concern
raised by commenters as to the potential challenge of verifying the
source of electronic addresses that a plan administrator already has in
a plan's records. For transition purposes, therefore, a plan
administrator may rely on these electronic addresses, provided that the
plan administrator acts reasonably, in good faith, and otherwise
complies with the requirements of the safe harbor. This includes
compliance with the new provision in paragraph (g) of the final rule,
which requires the initial notice to identify the electronic address to
which NOIAs (or emails pursuant to paragraph (k)) will be furnished
under the safe harbor. The plan administrator also would have to comply
with the protections in paragraph (f)(4) of the safe harbor, which
require a system to alert the plan administrator of an invalid or
inoperable electronic address. Absent compliance with these provisions,
the Department has less assurance of the reliability of the electronic
addresses at issue, in which case the Department may have a different
view about relying on such addresses. Under these circumstances, and
only as a transition matter, a plan administrator may rely on a
preexisting list of electronic addresses that is in existence on the
effective date of this final rule.
 A plan administrator would not satisfy the good faith condition of
this transition policy with respect to the use of any particular
electronic address from such a list if the plan administrator has
reason to know that such address is or may be invalid, inoperable, or
obtained from a person or entity other than the participant,
beneficiary, or employer, or acquired outside of the employment context
in which the plan exists. For example, many commercial entities with
diversified lines of business and affiliations serve as recordkeepers
and plan administrators, within the meaning of section 3(16) of ERISA,
for multiple retirement plans. These entities may acquire an electronic
address for a person, who is plan participant, in the routine course of
a business transaction unrelated to his or her retirement plan
participation. The person for instance
[[Page 31909]]
may have purchased an investment or insurance product in his or her
personal capacity. Although the address may be valid and operable, it
was not provided to the entity in the entity's capacity as a plan
administrator under section 3(16) of ERISA. Therefore, this address may
not be used under this transition policy. Commenters also explained
that these commercial entities sometimes use one or more locator
services or technologies to find and obtain electronic addresses for
individuals. Although addresses located through these services may be
valid and operable, they were obtained from a person other than the
participant, beneficiary, or employer, and perhaps without the
participant's knowledge. In these examples, the electronic addresses
were obtained in a manner or from a source that is too far removed from
the covered individual and the employment relationship to be
sufficiently reliable for use under the safe harbor.
C. E-SIGN Act
 For the reasons discussed below, covered documents for purposes of
this final rule are exempt from the consumer consent requirements of
the Electronic Signatures in Global and National Commerce Act, Public
Law 106-229 (114 Stat. 464) (2000) (E-SIGN Act), and this rule provides
an alternative method of complying with the requirement that covered
documents be furnished in writing. Section 101(c) of the E-SIGN Act
sets forth special protections that apply when a statute, regulation,
or other rule of law requires that information relating to a
transaction be provided or made available to a consumer in writing.
Section 101(e) of the E-SIGN Act provides that if a statute,
regulation, or other rule of law requires that a contract or other
record relating to a transaction in or affecting interstate or foreign
commerce be in writing, the legal effect, validity, or enforceability
of an electronic record of the contract or other record may be denied
if the contract or other record is not in a form that is capable of
being retained and accurately reproduced for later reference by all
parties or persons who are entitled to retain the contract or other
record.
 Under section 104(d)(1) of the E-SIGN Act, a federal regulatory
agency may exempt, without condition, a specified category or type of
record from the consumer consent requirements in section 101(c) if the
exemption is necessary to eliminate a substantial burden on electronic
commerce and will not increase the material risk of harm to consumers.
The final rule published today is an alternative method of compliance
which would satisfy section 104(d)(1) of the E-SIGN Act and, in
accordance with section 104 of the E-SIGN Act, the Department has
determined that there is substantial justification for this regulatory
exemption from the consent requirements of the E-SIGN Act because the
rule is necessary to eliminate a substantial burden on electronic
commerce and the rule will not pose a material risk of harm to
consumers. In the preamble to the proposed rule, the Department
requested comments as to whether there are additional, or different,
steps it could take to ensure that these proposal was consistent with
the requirements of section 104(d)(1) of the E-SIGN Act. The Department
stated that it was particularly interested in receiving comments that
provided suggestions or evidence related to whether the proposed rules
would (or would not) impose unreasonable costs on the acceptance and
use of electronic records. The Department did not receive substantive
commentary on these questions in response to the proposed rule. The
Department has determined that this final rule will not require (or
accord greater legal status, or effect to) the use of any specific
technology and that the rule is exempt from the consent requirements of
the E-SIGN Act.
D. Regulatory Impact Analysis
(1) Relevant Executive Orders for Regulatory Impact Analyses
 Executive Orders 12866 \69\ and 13563 \70\ direct agencies to
assess all costs and benefits of available regulatory alternatives and,
if regulation is necessary, to select regulatory approaches that
maximize net benefits (including potential economic, environmental,
public health and safety effects; distributive impacts; and equity).
Executive Order 13563 emphasizes the importance of quantifying costs
and benefits, reducing costs, harmonizing rules, and promoting
flexibility.
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 \69\ Regulatory Planning and Review, 58 FR 51735 (Oct. 4, 1993).
 \70\ Improving Regulation and Regulatory Review, 76 FR 3821
(Jan. 21, 2011).
---------------------------------------------------------------------------
 Under Executive Order 12866, ``significant'' regulatory actions are
subject to review by the Office of Management and Budget (OMB). Section
3(f) of the Executive Order defines a ``significant regulatory action''
as any regulatory action that is likely to result in a rule that may:
 (1) Have an annual effect on the economy of $100 million or more or
adversely and materially affect a sector of the economy, productivity,
competition, jobs, the environment, public health or safety, or state,
local, or tribal governments or communities (also referred to as
``economically significant'');
 (2) Create a serious inconsistency or otherwise interfere with an
action taken or planned by another agency;
 (3) Materially alter the budgetary impacts of entitlement grants,
user fees, or loan programs or the rights and obligations of recipients
thereof; or
 (4) Raise novel legal or policy issues arising out of legal
mandates, the President's priorities, or the principles set forth in
the Executive Order.
 The Department anticipates that this final regulatory action will
likely have economic impacts of $100 million or more in any one year,
and therefore meets the definition of an ``economically significant
rule'' within the meaning of section 3(f)(1) of Executive Order 12866.
Therefore, the Department has provided an assessment of the potential
benefits, costs, and transfers associated with this final rule. In
accordance with Executive Order 12866, this final rule was reviewed by
OMB. Pursuant to the Congressional Review Act (5 U.S.C. 801 et seq.),
OIRA has designated this rule as a ``major rule,'' as defined by 5
U.S.C. 804(2).
(2) Need for Regulatory Action
 Technology has changed substantially since the Department first
published the 2002 safe harbor.\71\ Broadband and wireless networks
have expanded. More people rely on email. Servers and personal
computers have improved. Smartphones, tablets, and other mobile devices
have become predominant modes of communication. In 2003, one year after
the existing safe harbor was established, approximately 62 percent of
households had one or more computers.\72\ In 2016, about 89 percent of
households had a computer, smartphone, or tablet.\73\ The share of U.S.
adults who own a smartphone increased from 35 percent in 2011 to 81
percent in 2019.\74\ The share of households with internet access at
home also increased, from 55 percent in 2003 \75\ to 82 percent in
2016.\76\
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 \71\ 29 CFR 2520.104b-1(c) (2002).
 \72\ Jennifer Cheeseman Day, Alex Janus, and Jessica Davis,
Computer and Internet Use in the United States: 2003, U.S.
Department of Commerce, Economics and Statistics Administration,
U.S. Census Bureau (2005).
 \73\ Camille Ryan, Computer and Internet Use in the United
States: 2016, American Community Survey Reports, ACS-39, U.S. Census
Bureau, August 2018.
 \74\ Monica Anderson, Mobile Technology and Home Broadband 2019,
Pew Research Center (June 13, 2019).
 \75\ See Cheeseman Day et al., supra note 72.
 \76\ See Ryan, supra note 73.
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[[Page 31910]]
 Consumers use the internet, smartphones, and other electronic
devices for a wide range of activities, including for conducting
financial transactions. According to a 2018 survey, a majority of
banked households used electronic banking services. Slightly fewer than
two-thirds accessed their accounts online in the past 12 months, and
about two in five accessed their accounts through their mobile
phones.\77\ The most common mobile banking activities were checking
emails from banks (44 percent) and checking account balances or recent
transactions online (35 percent).
---------------------------------------------------------------------------
 \77\ 2017 FDIC National Survey of Unbanked and Underbanked
Households, Federal Deposit Insurance Corporation, October 2018,
https://www.fdic.gov/householdsurvey/.
---------------------------------------------------------------------------
 As technological capabilities, internet access, and internet use
have increased, other government agencies have issued rules encouraging
wider use of electronic disclosure. The Social Security Administration
no longer sends paper statements to most workers. Instead, workers
register on the Administration's website for a ``my Social Security''
account to access their statements.\78\ The TSP uses paperless delivery
as the default for its quarterly statements.\79\ Annual TSP statements
are available both on a website and delivered by mail unless an
individual requests only electronic annual statements. TSP reported
that electronic paperless delivery saved about $7 to $8 million in
2006.\80\ On October 20, 2006, the Treasury Department and the IRS
published 26 CFR 1.401(a)-21, setting forth standards for electronic
notices and participant elections with respect to retirement plans and
similar employee benefit arrangements.\81\ Similarly, the SEC has
issued several regulations on electronic disclosure.\82\
---------------------------------------------------------------------------
 \78\ See Frequently Asked Questions, Social Security
Administration, https://faq.ssa.gov/en-us/Topic/article/KA-01741.
The Social Security Administration does, however, mail paper social
security statements to workers age 60 and older if they do not
receive social security benefits and they have not yet set up a ``my
social security'' account.
 \79\ 5 CFR 1640.6 (2003) (``The TSP will furnish the information
described in this part to participants by making it available on the
TSP website. A participant can request paper copies of that
information from the TSP by calling the ThriftLine, submitting a
request through the TSP website, or by writing to the TSP record
keeper''). See also Federal Thrift Savings Plan: Customer Service
Practices Adopted by Private Sector Plan Managers Should Be
Considered, U.S. Government Accountability Office, GAO-05-38, Jan.
2005, at 12, n. 21, http://www.gao.gov/new.items/d0538.pdf
(providing statistics on cost savings experience with TSP).
 \80\ See Minutes of the Meeting of the Board Members, Federal
Retirement Thrift Investment Board (Feb. 20, 2007), https://www.frtib.gov/MeetingMinutes/2007/2007Feb.pdf.
 \81\ Use of Electronic Media for Providing Employee Benefit
Notices and Making Employee Benefit Elections and Consents, 71 FR
61877 (Oct. 20, 2006).
 \82\ E.g., Optional Internet Availability of Investment Company
Shareholder Reports, 83 FR 29158 (June 22, 2018); Internet
Availability of Proxy Materials, 72 FR 4148 (Jan. 29, 2007); and
Updated Disclosure Requirements and Summary Prospectus for Variable
Annuity and Variable Life Insurance Contracts, Investment Company
Act Release No. 33814 (Mar. 11, 2020).
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 The ERISA Advisory Council has, over the years, recommended
improving the 2002 safe harbor. The Council's 2017 report recommended a
move toward electronic delivery.\83\ Electronic delivery, according to
the report, is more helpful to participants and reduces disclosure
costs.\84\ The Council's 2009 report recommended that the Department
adopt electronic disclosure regulations more aligned with 26 CFR
1.401(a)-21(c).\85\
---------------------------------------------------------------------------
 \83\ Mandated Disclosure for Retirement Plans--Enhancing
Effectiveness for Participants and Sponsors, ERISA Advisory Council
on Employee Welfare and Pension Benefit Plans, Nov. 2017, at 34,
https://www.dol.gov/sites/dolgov/files/EBSA/about-ebsa/about-us/erisa-advisory-council/2017-mandated-disclosure-for-retirement-plans.pdf.
 \84\ Id. at 17.
 \85\ Advisory Council Report on Promoting Retirement Literacy
and Security by Streamlining Disclosures to Participants and
Beneficiaries, ERISA Advisory Council on Employee Welfare and
Pension Benefit Plans, 2009, https://www.dol.gov/agencies/ebsa/about-ebsa/about-us/erisa-advisory-council/2009-promoting-retirement-literacy-and-security-by-streamlining-disclosures-to-participants-and-beneficiaries.
---------------------------------------------------------------------------
 The Government Accountability Office (GAO) has also made
recommendations to the Department. In 2013, GAO recommended that SPDs
and SMMs be posted on continuous access websites.\86\ GAO also
recommended adding ``clear, simple, brief highlights'' of required
disclosures.\87\ GAO noted that ``the quantity of information
diminishes the positive effects.'' \88\
---------------------------------------------------------------------------
 \86\ Private Pensions: Clarity of Required Reports and
Disclosures Could Be Improved, Government Accountability Office,
GAO-14-92, Nov. 2013, at 40, https://www.gao.gov/assets/660/659211.pdf.
 \87\ Id. at 41.
 \88\ Id. at 29.
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 On August 31, 2018, President Trump's Executive Order 13847 \89\
instructed the Department to make retirement plan disclosures required
under ERISA more understandable and useful for participants, while
reducing the costs and burdens imposed on plan sponsors. The Executive
Order also directed the Department to explore increasing electronic
disclosures, to improve their effectiveness and reduce costs and
burdens.
---------------------------------------------------------------------------
 \89\ 83 FR 45321 (Aug. 31, 2018).
---------------------------------------------------------------------------
 In October 2019, the Department responded to Executive Order 13847
by publishing a proposed rule to establish an alternative electronic
disclosure safe harbor. The proposed rule does not disturb the
Department's 2002 safe harbor for electronic delivery.
 According to the Private Pension Plan Bulletin, there were
approximately 710,000 private retirement plans, with over 137 million
participants in 2017.\90\ Many participants were already receiving
disclosures electronically under the Department's 2002 safe harbor for
electronic delivery. Under the Department's new rule, plan
administrators will have still more flexibility to electronically
deliver covered documents, either by furnishing an NOIA directing
participants to a website, or by furnishing covered documents directly
by email.
---------------------------------------------------------------------------
 \90\ Private Pension Plan Bulletin, Abstract of 2017 Form 5500
Annual Reports, Employee Benefits Security Administration, September
2019, at 2, https://www.dol.gov/sites/dolgov/files/EBSA/researchers/statistics/retirement-bulletins/private-pension-plan-bulletins-abstract-2017.pdf.
---------------------------------------------------------------------------
(3) Impacts
 The Department expects the final rule to increase electronic
delivery and save money by reducing the production and mailing costs
associated with paper disclosures. The Department estimates that it
costs plans approximately $514 million annually to mail seven specific
disclosures.\91\ The Department estimates that switching to electronic
disclosures will likely save plans $419 million in the first year. Such
savings would be partly offset by the estimated $232 million plans may
pay to maintain websites, prepare NOIAs, and produce and distribute
initial notifications. These added costs bring net savings to $187
million, a 36 percent reduction from the current $514 million burden.
In the second year, net savings increase to $338 million, a 66 percent
reduction. Over 10 years, the new rule saves approximately $3.2 billion
net, annualized to $371 million per year
[[Page 31911]]
(using a 3 percent discount rate).\92\ Using a perpetual time horizon
(to allow the comparisons required under E.O. 13771), the annualized
cost savings in 2016 dollars are $319 million at a 7 percent discount
rate.\93\ Since long-term projections are inherently uncertain,
however, the Department cautions against relying on the perpetual
annualized cost savings estimate for purposes other than the required
analyses under E.O. 13771. The fast pace of technological innovation
makes it especially difficult to project cost savings into the distant
future.
---------------------------------------------------------------------------
 \91\ Pursuant to paragraph (i) of the proposed rule, seven
disclosures could be included in a single annual combined NOIA.
Those seven disclosures were the SPD, SMM, SAR, annual funding
notice, 404(a)(5)/404(c) disclosure, annual QDIA notice, and pension
benefit statement. In response to public comments, however, the
Department revised paragraph (i) in the final rule. As a result,
some of these seven disclosures can be no longer included in a
single annual NOIA. For example, a single annual combined NOIA does
not include a SMM and a quarterly pension benefit statement. Despite
this change in the final rule, for the purposes of estimating cost
savings associated with this new safe harbor, the Department
included all seven disclosures because all these seven disclosures
can still be delivered electronically, just not with one single
annual combined NOIA. In its burden estimates, the Department
accounted for the fact that some plan administrators will email
NOIAs multiple times per year under the final rule instead of
emailing one single annual combined NOIA, as would have been
permitted under the proposal. The Department updated these burden
estimates using 2019 wage rates and 2017 retirement plan-related
data.
 \92\ The net cost savings will be an estimated $2.6 billion over
10-year period, annualized to $365 million per year, if a 7 percent
discount rate is applied.
 \93\ The cost savings in years 11 and beyond are estimated using
the same methodology as for years 1 to 10, which is explained in the
following section.
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(i) 10-Year Cost Saving Projection
 The Department based its projections on two assumptions: (1) The
number of participants will grow at 0.5 percent per year; \94\ and (2)
the percentage of participants opting out of the default electronic
delivery system will gradually decrease, from 18.5 percent to 7.5
percent, over the 10-year period.\95\ The Department's 10-year
projection may overstate cost savings because the number of
participants receiving electronic disclosures could increase on its own
under the 2002 safe harbor, even without this final rule. Similarly,
plans could cut costs related to producing and mailing paper
disclosures even without this final rule. On the other hand, the
Department's 10-year projection may understate savings if there are a
smaller than assumed number of electronic delivery failures for NOIAs
over time, as plan administrators develop and maintain the most up-to-
date lists of covered individuals' electronic addresses. (The
Department based its current projection on the assumption that the
rates of undelivered NOIAs will remain constant over the 10-year
period.) If undelivered NOIAs decrease, production and mailing costs
for covered documents will decrease and net cost savings will increase
over the 10-year period. These cost savings may indirectly benefit
covered individuals, as they may defray plan expenses and lower direct
or indirect participant fees.
---------------------------------------------------------------------------
 \94\ The U.S. Bureau of Labor Statistics projects that total
employment will grow at 0.5 percent annually from 2018 to 2028.
Based on this projection, the Department assumes that the total
number of participants will also increase at 0.5 percent each year.
See Kevin S. Dubina, Teresa L. Morisi, Michael Rieley, and Andrea B.
Wagoner, Projection overview and highlights, 2018-2028, Monthly
Labor Review, U.S. Bureau of Labor Statistics, October 2019, https://www.bls.gov/opub/mlr/2019/article/pdf/projections-overview-and-highlights-2018-28.pdf.
 \95\ The Department assumes that approximately 18 percent of
participants currently receiving disclosures by mail will opt out of
default electronic delivery in the first year and 16.2 percent will
opt out in the second year. The Department projects the opt-out
rates will decrease gradually at rates consistent with exponential
decay function, a * b(t-1), where a is the
initial opt-out rate, 18 percent, t is year, and b is the decay
rate, 0.9 (= 16.2/18). The Department further projects that in the
10th year, only 7 percent of participants currently receiving paper
disclosures by mail will continue to do so. Then the Department made
an additional adjustment by adding 0.5 percentage point annually to
account for the requirement in paragraph (f)(4) of the final rule
regarding invalid or inoperable electronic addresses for covered
individuals. For more detailed discussion, see Quantified Costs,
below.
---------------------------------------------------------------------------
(ii) Cost Savings
 The Department's cost savings estimates understate the potential
savings generated from this final rule, because they account for the
production and mailing costs of only seven covered documents.\96\ The
seven documents are among the most costly because they affect a lot of
plans and plans must provide them to participants regularly.\97\ But
the final rule will cover other pension documents, such as blackout
notices, which are provided irregularly because they are triggered by
certain events. The cost savings associated with these disclosures is
relatively small because they affect far fewer plans and individuals.
For that reason, the Department estimated cost savings using only the
seven regularly distributed, covered documents. If all covered
documents are included, the cost savings generated by the final rule
will likely be larger.
---------------------------------------------------------------------------
 \96\ The seven covered documents are the SPD, SMM, SAR, annual
funding notice, 404(a)(5)/404(c) disclosure, annual QDIA notice, and
pension benefit statement.
 \97\ Out of these seven disclosures, all but one (pension
benefit statement) have associated information collection requests
under the Paperwork Reduction Act. To estimate cost savings
attributable to this final rule, the Department estimated the
current cost burden associated with pension benefits statements,
although it is not a part of the Department's information collection
inventory.
---------------------------------------------------------------------------
 In estimating cost savings, the Department assumes that slightly
more than half (56 percent) of disclosures are already delivered
electronically under the 2002 safe harbor.\98\ According to one
commenter, 40 to 50 percent of participants receive disclosures
electronically, likely from plans relying on the Department's 2002 safe
harbor. One service provider reported 62 percent of participants
elected electronic delivery in 2018.\99\ Another commenter reported 58
percent of defined contribution (DC) plan participants accessed plan
information, including legal notices, electronically.
---------------------------------------------------------------------------
 \98\ This is consistent with the assumption used for information
collections.
 \99\ Default Electronic Delivery Works: Evidence of Improved
Participant Outcomes form Electronic Delivery of Retirement Plan
Documents, Quantria Strategies, prepared for The SPARK Institute,
November 2019, at 25, https://www.sparkinstitute.org/wp-content/uploads/2019/12/SPARK-Institute-Default-Electronic-Delivery-Works.pdf.
---------------------------------------------------------------------------
 For its cost savings estimate, the Department used the same
methodology it uses to estimate the cost of distributing printed
disclosures for information collections subject to the Paperwork
Reduction Act.\100\ Preparation costs generally include costs required
to develop the content and format of disclosures. Distribution costs
generally include materials, printing, and mailing costs as well as
burden hours associated with providing disclosures to participants and
beneficiaries. The Department's estimates assume that preparation costs
will be unchanged by the final rule, because the rule does not change
the content disclosures.
---------------------------------------------------------------------------
 \100\ The distribution costs were estimated using the most
recent data available, including updated 2019 wage rates and 2017
retirement-plan related data.
---------------------------------------------------------------------------
(iii) Quantified Costs
 While the Department expects the final rule to reduce costs
associated with distributing covered disclosures, these savings are
partly offset by costs related to the following requirements:
 (1) Furnishing the NOIA (paragraph (d) of the final rule);
 (2) Providing the website for covered individuals to access covered
documents (paragraph (e) of the final rule); and
 (3) Distributing the initial notifications of default electronic
delivery and right to opt out in paper to each individual before he or
she becomes a covered individual (paragraph (g) of the final rule).
 The Department assumes plans will incur one-time start-up costs to
develop the NOIA and initial notifications. Such costs include ensuring
the notifications comply with final regulatory requirements. The
Department also assumes that costs for distributing NOIAs will be
modest, because they may be distributed electronically. However, the
initial notification of default electronic delivery and right to opt
out would impose production and mailing costs. Plans that rely on the
new email alternative, permitted under paragraph (k) of the rule, will
email disclosures to participants rather than furnishing NOIAs. Certain
types of plans will furnish NOIAs more often than other plan types, as
required under
[[Page 31912]]
paragraph (i) of the rule. For example, participant-directed DC plans
must provide NOIAs more often than non participant-directed DC plans,
because they must notify participants quarterly rather than annually.
 The initial notification and right to opt out is a transitional
notice that informs participants who are existing employees of changes
in default delivery system to electronic delivery.\101\ Administrators
must furnish this notice in paper form to each person before they
become a covered individual. The notice informs them that covered
documents will be furnished electronically, that they have the right to
request paper copies of the covered documents free of charge, and how
they may exercise such rights. The Department anticipates that most
plans will rely on this final rule, delivering covered documents
electronically to participants who were not eligible under the existing
safe harbor without disrupting the current electronic delivery system
under the Department's 2002 safe harbor. Thus, plans are mostly likely
to furnish initial notices to those participants who currently receive
disclosures by mail.
---------------------------------------------------------------------------
 \101\ For newly hired employees, the Department assumes they
will receive the notice required by paragraph (g) of the final rule
in their new employee packets; thus, employers will incur only
negligible costs in subsequent years.
---------------------------------------------------------------------------
 Retirement plans will incur one-time costs to develop and design an
initial notice. Because the final rule clearly describes the specific
information required of this notice, the Department expects initial
costs to be modest, about $40 million on aggregate assuming all
retirement plans decide to rely on this final alternative.\102\ The
Department estimates that approximately 60 million retirement plan
participants received the covered documents by mail in 2017.\103\ These
participants could potentially receive the initial notice from their
plan administrators. Assuming a one-page notice is mailed to these 60
million participants, the Department estimates the costs of
distributing and mailing the initial notice will be about $97
million.\104\ Therefore, the Department estimates that retirement plans
will incur approximately $138 million in one-time costs to develop and
mail the initial notice. In subsequent years, the Department estimates
that retirement plans will incur approximately $12 million each year to
deliver the initial notice to new hires.\105\
---------------------------------------------------------------------------
 \102\ The Department estimates that attorneys will take
approximately 296,000 hours to develop and review the initial
notice. Assuming an hourly rate of $138.41 for in-house attorneys,
the Department estimates developing the initial notice will cost
approximately $41 million (295,636 hours * $138.41). Then $41
million is discounted at three percent, which leads to $40 million.
 \103\ Information collection requests associated with the SPD,
SMM, SAR, and 404(a)(5)/404(c) disclosures assume that approximately
56 percent of participants electronically receive those disclosures
from plans that rely on the 2002 safe harbor. According to the 2017
Private Pension Bulletin, there are approximately 137 million
participants. Therefore, the Department estimates that approximately
60 million participants (44 percent of 137 million) receive
disclosures by mail.
 \104\ This estimate is based on $36 million mailing costs
(approximately 60 million notices * $0.60) and $64 million
production costs, assuming an hourly rate of $64.11 for in-house
mailing clerks (approximately 998,000 hours * $64.11). Then $36
million mailing costs and $64 million preparation costs are
discounted at three percent, which lead to $35 million and $62
million respectively.
 \105\ According to the Current Population Survey (CPS) in 2018,
approximately 16.8 percent of wage and salary workers aged 25 or
older stayed with their current employers for a year or less. Based
on this information, the Department estimates approximately 13
million workers will receive the initial notice each year as new
hires.
---------------------------------------------------------------------------
 Paragraph (g) of the final rule provides that the initial notice
must identify the recipient's electronic address where NOIAs are to be
delivered. Although this revision requires personalization of the
notice, the Department does not expect this change to significantly
impact costs because many plan administrators already incorporate this
process as common business practice.\106\
---------------------------------------------------------------------------
 \106\ Because it contains personally identifiable information,
such as email address, the Department assumes employers will mail
notice in a sealed letter rather than a postcard, even though a
postcard is a less expensive option.
---------------------------------------------------------------------------
 Paragraph (e) of the final rule requires plan administrators to
ensure the existence of a website at which plan participants can access
covered disclosures. In the proposed rule, the Department assumed this
requirement would impose modest one-time costs. However, the Department
was particularly concerned about burdening small plans and so solicited
comments regarding the fraction of plans, particularly small plans,
that would need to develop or modify a website. One commenter claimed
that small plans have websites and not burdened by the proposed
``notice and access'' approach. However, another commenter suggested
that small plans are less likely to have their own websites. A
different commenter suggested that the impacts of paragraph (e) would
vary by types of plans and that the vast majority of participant-
directed DC plans already have access to or actively maintain a
website, while many defined benefit plans or nonparticipant-directed DC
plans may not.\107\
---------------------------------------------------------------------------
 \107\ According to a commenter, this is because 29 CFR
2550.404a-5 currently requires that participant-directed individual
account plans maintain a website to provide certain information to
participants and beneficiaries. Defined benefit and nonparticipant-
directed DC plans are not subject to 29 CFR 2550.404a-5.
---------------------------------------------------------------------------
 According to a recent poll of plan sponsors, the majority already
have websites, in-house (70 percent) or via service providers (62.5
percent), and many have both.\108\ One study suggests that
approximately 18 percent of profit sharing and 401(k) plans did not
provide any services via internet in 2017.\109\ Based on these comments
and study, the Department estimates that approximately 25,000 plans
currently do not have, directly or indirectly through a plan service
provider, a website where they can post the covered documents.\110\
---------------------------------------------------------------------------
 \108\ Plan Sponsor Council of America (PSCA) conducted a poll to
plan sponsors in November 2019 to obtain the plan sponsors'
perspectives on the proposed rule and received responses from 56
plan sponsors.
 \109\ 61st Annual Survey, Reflecting 2017 Plan Experience, Plan
Sponsor Council of America, 2018. (In this survey, plan sponsors
were asked to indicate if any services--enrollment, plan inquiries,
contribution changes, balance inquiries, investment changes, loans,
hardship distribution, retirement distributions, or no services--
were provided to participants via internet. Responding to this
question, about 18 percent of plan sponsors indicated they did not
provide any services to participants through the internet. The
Department used this as a proxy for plans that do not have a
website.)
 \110\ According to Private Pension Plan Bulletin 2017, there
were over 143,000 defined benefit plans and nonparticipant-directed
defined contribution plans. Applying an assumption of 18 percent,
the Department estimates approximately 25,984 (143,558 * 0.181)
plans currently lack websites. This estimate may understate the
total number of plans that lack websites because the PSCA study
examined profit-sharing plans and 401(k) plans. As discussed, most
401(k) plans are expected to have their own websites. Therefore, the
fraction of defined benefit plans and nonparticipant-directed DC
plans that lack websites would be likely higher than 18 percent.
---------------------------------------------------------------------------
 Although approximately 25,000 plans do not currently have a
website, the Department expects the impact of paragraph (e) of the
final rule to be minimal, in part, because paragraph (k) of the final
rule allows plans to furnish covered documents by email. Commenters
recommended the direct delivery approach in paragraph (k) for a number
of reasons, one being that plans may not currently have a website.\111\
The Department assumes plans that do not have a website for posting the
covered documents will most likely email the covered documents
directly. The direct delivery option will likely ease the burden on
small plans, as they are less likely to have, or have access to, a
website. However, paragraph (k) of the final rule is still subject to
the requirements of paragraph (f)(4) of the
[[Page 31913]]
final rule, pertaining to invalid or inoperable electronic addresses.
Therefore, plans that do not have software to detect invalid or
inoperable electronic addresses will likely incur costs to add such
software.
---------------------------------------------------------------------------
 \111\ The direct delivery provision in paragraph (k) is not
subject to the website standards in paragraph (e) of the safe
harbor.
---------------------------------------------------------------------------
 Paragraph (e)(2)(ii) of the final regulation establishes how long
covered documents must remain on a website. It generally requires
covered documents to remain on the website for at least one year.\112\
Once a covered document is posted on a website, the Department assumes
that the storage cost of retaining such document on the website is
nominal.\113\ The Department requires plan administrators to include a
cautionary statement in the NOIA relating to how long the covered
document is required to be available on the website. The Department
expects this statement can benefit both participants and plan
administrators. The statement will encourage participants to download
covered documents while they are available on the website rather than
contacting plan administrators to request them. Plan administrators
will benefit because they will likely receive fewer document requests.
---------------------------------------------------------------------------
 \112\ As discussed above in section B, paragraph (e)(2)(ii) of
the final rule does not alter a plan administrator's general
recordkeeping requirements under ERISA.
 \113\ As more documents remain on a website, plans may need more
electronic storage. However, storage space prices have decreased
substantially as cloud services become more widely available. In
terms of adding storage space cloud services are available, on
average, at a rate of $0.018 to $0.021 per GB per month. Some
estimate that approximately 250,000 PDF files or other typical
office documents can be stored on 100GB. Accordingly, the Department
does not believe electronic storage will significantly increase cost
burden. (For more detailed pricing information of three large cloud
service providers, see https://cloud.google.com/products/calculator;
or https://azure.microsoft.com/en-us/pricing/calculator/; or https://calculator.s3.amazonaws.com/index.html. Augmenting other features
such as enhanced security services may increase costs of cloud
service. However, plan administrators sometimes may find it
appropriate to provide enhanced security features for participants
despite increased costs.) Also, plan administrators that currently
store documents electronically to satisfy general recordkeeping
requirements under ERISA may already have sufficient electronic
storage space; thus, the burden increase from this condition would
not be significant.
---------------------------------------------------------------------------
 Paragraph (f)(4) of the final rule requires plan administrators to
take certain actions when alerted that a covered individual's
electronic address has become invalid or inoperable. For example, if an
NOIA is returned as undeliverable, the plan administrator must try to
locate the correct address. Accordingly, plans may incur costs to
detect invalid or inoperable electronic addresses and update them. If
an accurate electronic address cannot be found, plan administrators may
treat those covered individuals as if they opted out of electronic
disclosure and furnish their documents via mail.
 To meet the requirements of paragraph (f)(4), plan administrators
may purchase software to detect the validity and operability of
electronic addresses. The Department invited comments about such costs
and received none. The Department assumes that, while most plans
already have such features built into their current electronic delivery
systems, slightly less than 26,000 plans will purchase software to
comply with the provision.\114\ The Department estimates these costs
will run approximately $8.8 million per year.\115\
---------------------------------------------------------------------------
 \114\ The Department understands that software is commercially
available to produce a list of email addresses that have bounced
back with the owners' name, export the list into different formats,
and, in certain circumstances, remove invalid email addresses from
the list. Such software also generates and reports relevant
statistics such as bounce rate, open rate, and click-through rate.
Some software automatically re-attempts delivery depending on the
reasons of failed delivery. Given the lack of data, the Department
used the percentage of plans without their own websites as a proxy
for plans that lack email tracking capability.
 \115\ The Department gathered pricing information for five
commercial software packages that ranged from $10 per month to $320
per month, depending on the volume and sophistication of features
available. Taking the average of basic level prices of these five
products, the Department assumes that it would cost $28.20 per month
($338.40 per year) to subscribe. Assuming 25,984 plans would
purchase this type of product, the Department estimates that the
aggregate costs will total $8.8 million (25,984 plans * $338.40).
---------------------------------------------------------------------------
 The Department assumes that before mailing out covered documents to
the recipients of an undelivered NOIA, plan administrators will attempt
to resolve issues that are relatively easy to fix, such as redelivering
bounced emails or reaching out to covered individuals to update
electronic addresses. Plan administrators may treat covered individuals
who are more difficult to locate, such as those who have separated from
service, as having opted out of electronic delivery. Although the
Department acknowledges that plan administrators may spend time
attempting to correct failed delivery, as provided in paragraph (f)(4)
of the proposal, it does not have sufficient data to quantify
associated costs. The Department assumes, however, that plan
administrators will likely select the least costly and most efficient
option. Therefore, the Department assumes that plan administrators will
mail documents when unable to locate a covered participant's electronic
address.
 For this regulatory impact analysis, the Department assumes that
the requirement to remediate failed delivery will increase the global
opt-out rate by 0.5 percentage points.\116\ The Department assumes that
plan administrators will exercise due diligence by reaching out to
participants with invalid or inoperable electronic addresses rather
than immediately treating them as having opted out of electronic
delivery. If true, the global opt-out rate should not increase over
time. The 0.5 percentage point increase in the global opt-out rate is
reflected in the cost savings estimates for the seven covered
documents.
---------------------------------------------------------------------------
 \116\ One industry report indicates that a well-targeted and
maintained email list yields, on average, a 1.06% bounce rate. (See
Update Email Marketing Benchmarks for 2020: By Day and Time,
Campaign Monitor, https://www.campaignmonitor.com/resources/guides/email-marketing-benchmarks/.) EBSA's newsletter email deliveries
yield a 4% bounce rate. Although the Department's assumed 0.5%
bounce rate is lower than the information discussed here, the
Department believes that, in general, plan administrators are able
to generate and maintain more accurate and current electronic
addresses for covered individuals.
---------------------------------------------------------------------------
 This final rule provides a comprehensive alternative to the 2002
safe harbor. As a result, many more participants and beneficiaries may
be easily covered. Although some plan sponsors using the 2002 safe
harbor may switch entirely to the final rule, the Department assumes
that most will maintain existing systems and use the final rule to
cover individuals that fall outside of the existing safe harbor.
(iv) Quantified Net Cost Savings
 The Department's estimates of the net cost savings from the final
regulations are summarized in Table 1 below.
 Table 1--Estimated Cost Savings Attributable to the Final Rule
 [$ million]
----------------------------------------------------------------------------------------------------------------
 Total over 10
 1st Year 2nd Year 3rd Year years
----------------------------------------------------------------------------------------------------------------
Cost Savings from Eliminating Printing & Mailing
 Costs:
[[Page 31914]]

Summary Plan Description........................ $68 $69 $68 $663
Summary of Material Modification................ 18 18 18 172
Summary Annual Report........................... 61 61 60 585
Annual Funding Notice........................... 40 40 40 390
404(a)(5)/404(c) Disclosure..................... 106 106 105 1,021
Annual QDIA Notice.............................. 16 16 16 156
Pension Benefits Statement...................... 110 109 109 1,058
 ---------------------------------------------------------------
 Subtotal: Gross Cost Savings [1]............ 419 419 416 4,046
----------------------------------------------------------------------------------------------------------------
Costs Imposed by the Final Rule:
Website......................................... -27 -27 -26 -240
Initial Notification and Right to Opt Out....... -138 -12 -12 -235
Notice of Internet Availability................. -67 -42 -41 -404
 ---------------------------------------------------------------
 Subtotal: Costs of the final rule [2]....... -232 -81 -78 -880
----------------------------------------------------------------------------------------------------------------
 Total Net Cost Savings: [1]-[2]......... 187 338 338 3,166
----------------------------------------------------------------------------------------------------------------
Note: Totals in table may not sum precisely due to rounding.
Total over 10 years and all other costs and cost savings estimates are discounted at three percent annually.
 The estimated cost savings of each covered disclosure reflects an
assumption about participant behavior. The Department assumes that
approximately 81.5 percent of participants who currently receive paper
copies will switch to electronic documents, while the remaining 18.5
percent will choose paper.\117\ This assumption is based on the
American Community Survey (ACS) estimate that about 82 percent of U.S.
households had internet subscriptions in 2016.\118\ This assumption may
overstate the cost savings because some participants with internet
access at home may prefer to receive paper copies, and thus opt
out.\119\ On the other hand, this assumption may understate the cost
savings, because households with DC plans tend to have higher internet
access rates and may be more comfortable online, which could lead to a
lower opt-out rate.\120\ In projecting cost savings for 10 years, the
Department assumes that by the 10th year this opt-out rate will
gradually decrease to 7.5 percent of participants currently receiving
paper.\121\
---------------------------------------------------------------------------
 \117\ Among participants who currently receive paper disclosures
by mail (rather than electronically under the existing 2002 safe
harbor), the Department assumes 18.5 percent of these participants
will opt out of electronic delivery under this final rule and
receive paper copies. This 18.5 percent global opt-out rate reflects
a 0.5 percentage point upward adjustment due to failed deliveries of
internet availability NOIAs, such as bounced emails. Without this
adjustment, the global opt-out rate would be 18 percent, which is
consistent with the data from American Community Survey 2016.
 \118\ Ryan, supra note 73.
 \119\ Some commenters argued that individuals, particularly
retirees and individuals older than 55, prefer paper and, in certain
cases, comprehend better if financial information is presented in
paper form.
 \120\ According to one study, among households owning DC plan
accounts, 92 percent used the internet at home, work, or other
location in 2018. (See 2019 Investment Company Fact Book, A Review
of Trends and Activities in the Investment Company Industry,
Investment Company Institute (April 2019), https://www.ici.org/pdf/2019_factbook.pdf.). Another survey suggests that 99 percent of
respondents have a computer at home or work that is connected to the
internet, and 84 percent agree that employers can provide retirement
plan information electronically if they can opt out at any time.
This implies approximately 83 percent (99% * 84%) have internet
access and would agree to receive plan information electronically,
which is similar to the Department's assumption of 82 percent. (See
Quantria Strategies, supra note 97, at 3, 5.) Note that in these
studies, ``use the internet'' includes access to the internet at
home, work or other locations. Thus, the share of households using
the internet in these studies are higher than the share of
households accessing the internet at home that the Department relies
on in estimating opt-out rates.
 \121\ Based on the American Community Survey (ACS) data from
2016 and 2017, the Department assumes the opt-out rate for the 2nd
year is 16 percent. The Department's opt-out rate projections are
based on these two recent years of ACS data and, while the rates
gradually decline each year, they do not reach zero at any point in
the future. This also reflects the 0.5 percentage point upward
adjustment due to bounced emails.
---------------------------------------------------------------------------
 Table 2 shows the Department's estimates of the number of
participants who currently receive disclosures on paper.
 Table 2--Estimated Number of Participants Currently Receiving Paper
 Disclosures
------------------------------------------------------------------------
 Number of
 Disclosures participants
 (million)
------------------------------------------------------------------------
Summary Plan Description................................ 19
Summary of Material Modification........................ 17
Summary Annual Report................................... 45
Annual Funding Notice................................... 29
404(a)(5)/404(c) Disclosure............................. 33
Annual QDIA Notice...................................... 17
Pension Benefits Statement.............................. 50
------------------------------------------------------------------------
 Table 3 summarizes the Department's projected number of
participants who will receive disclosures electronically due to the
final rule.
[[Page 31915]]
 Table 3--Projected Number of Participants Receiving Disclosures Electronically Due to the Final Rule
 [million]
----------------------------------------------------------------------------------------------------------------
 Disclosures 1st Year 2nd Year 3rd Year 10th Year
----------------------------------------------------------------------------------------------------------------
Summary Plan Description........................ 16 16 17 19
Summary of Material Modification................ 14 15 15 17
Summary Annual Report........................... 36 37 38 43
Annual Funding Notice........................... 23 24 25 28
404(a)(5)/404(c) Disclosure..................... 27 28 28 32
Annual QDIA Notice.............................. 14 14 15 17
Pension Benefits Statement...................... 41 42 43 48
----------------------------------------------------------------------------------------------------------------
 Table 4 provides the estimated average per-participant cost of
distributing disclosures on paper.
 Table 4--Estimated Average Per-Participant Cost of Distributing
 Disclosures on Paper
------------------------------------------------------------------------
 Per-
 Disclosures participant
 cost
------------------------------------------------------------------------
Summary Plan Description................................ $4.48
Summary of Material Modification........................ 1.28
Summary Annual Report................................... 1.72
Annual Funding Notice................................... 1.79
404(a)(5)/404(c) Disclosure............................. 4.07
Annual QDIA Notice...................................... 1.18
Pension Benefits Statement.............................. 2.79
------------------------------------------------------------------------
(v) Non-Quantified Costs (Potential Adverse Impacts)
 While overall, 82 percent of U.S. households had access to the
internet at home in 2016, the following groups had lower rates: Limited
English speaking households (63 percent), households with income less
than $25,000 (59 percent), households where the head of the household
is age 65 or older (68 percent), Black households (73 percent),
households in nonmetropolitan areas of the South (69 percent), and
households where the head of the household obtained a high school
diploma or less (56 percent).\122\ Responding to these relatively low
rates, some commenters pointed out that households with DC plan
accounts tend to have higher internet access rates. For example, an ICI
report found that among households with DC accounts, 79 percent with
income less than $50,000 and 81 percent with a senior (65 or older)
head of the household use the internet at home, work, or other
locations.\123\ Although these internet access figures are only
slightly lower than those of all U.S. households (82 percent), they are
significantly lower than those of all DC plan account holding
households (93 percent).
---------------------------------------------------------------------------
 \122\ Ryan, supra note 73.
 \123\ 2019 Investment Company Fact Book, A Review of Trends and
Activities in the Investment Company Industry, Investment Company
Institute (April 2019), https://www.ici.org/pdf/2019_factbook.pdf.
---------------------------------------------------------------------------
 Another group worth noting is households connected to the internet
only through smartphones. Racial/ethnic minorities and low-income
households are overrepresented in this group.\124\ In 2015,
approximately 8 percent of households in the United States were
``handheld- device-only'' households, but 16 percent of households
where the head of the household obtained a high school diploma or less
were handheld-device-only households. In contrast, only 3 percent of
households where the head of the household obtained a bachelor's degree
or higher were handheld-device-only households.\125\ Although connected
to the internet, these households may not be able to fully harness the
efficiency, capacity, and convenience of the internet. Therefore,
accessing disclosures online for these households may not be as
convenient as for other households.
---------------------------------------------------------------------------
 \124\ Ryan, supra note 73.
 \125\ Jamie M. Lewis, Handheld Device Ownership: Reducing the
Digital Divide? Social, Economic, and Housing Statistics Division,
U.S. Census Bureau, Working Paper 2017-04, Mar. 2017, .https://
www.census.gov/content/dam/Census/library/working-papers/2017/demo/SEHSD-WP2017-04.pdf.
---------------------------------------------------------------------------
 In response to numerous comments, the Department added paragraph
(e)(4) to the final rule, which defines ``website'' to include internet
websites and other electronic-based information repositories, such as
mobile applications. With this change, the Department believes that the
final rule can better accommodate advances in technology. This change
also requires that covered documents delivered through mobile
applications be presented in a format that can be read using a handheld
device. Consequently, these handheld-device-only households will be
able to access their plan information with ease. Ensuring handheld-
device-only households are able to access the same information as other
households may help bridge the digital divide because the gaps in
smartphone ownership are less prominent than in home internet access.
For example, there is almost no disparity in smartphone ownership rates
by race. According to a 2019 survey, Whites, Blacks, and Hispanics own
smartphones at nearly the same rate (82 percent, 80 percent, and 79
percent, respectively).\126\
---------------------------------------------------------------------------
 \126\ Mobile Fact Sheet, Pew Research Center, June 12, 2019,
https://www.pewresearch.org/internet/fact-sheet/mobile/.
---------------------------------------------------------------------------
 For participants without ready internet access, this final rule may
create additional impediments to accessing critical plan information.
Those who fail to opt out and request paper documents will have to
leave home (e.g., visit a public library or the home of a friend or
family member) to access plan information. One of the Department's
goals in establishing the final framework was to be certain that,
regardless of delivery method, covered individuals who wish to receive
paper copies would be able to do so without undue burden. For this
reason, the final rule allows for global opt out. That is, a covered
individual who prefers to receive all covered documents in paper may
choose to do so through a single request.
 If covered individuals in groups with low internet access rates
fail to request paper copies of covered documents or exercise their
opt-out rights, the negative impacts they suffer may offset some
benefits of this final regulation. The Department does not have
sufficient data to quantify these negative impacts. If these unintended
consequences occur, plan administrators may take steps to limit their
impact. Such steps may include reaching out to these groups;
communicating the plan's electronic disclosure policy effectively;
providing sufficient time for participant education before implementing
electronic disclosure changes; and employing simple processes for
requesting print documents, opting out of electronic disclosure, and
establishing and resetting passwords. Such steps might
[[Page 31916]]
help ensure that the cost savings discussed above is realized without
burdening vulnerable groups.
 As with all agencies facing heightened cybersecurity concerns, the
Department recognizes that increased electronic disclosures may expose
covered participants' information to intentional or unintentional data
breach. Paragraph (e)(3) of the proposal requires the plan
administrator to take measures reasonably calculated to ensure that the
website protects the confidentiality of personal information relating
to any covered individual. As required under ERISA section 404, the
Department expects that many plan administrators, or their service or
investment providers, already have secure systems in place to protect
covered individuals' personal information. Such systems should reduce
covered individuals' exposure to data breaches.
 Some commenters asserted that the Department should consider
participants' preferences for paper disclosures before finalizing the
rule. According to these commenters, investors prefer to receive
disclosures by mail and comprehend paper documents better than
electronic documents. Commenters with opposing views criticized these
claims and stated that they are based on dated studies. The Department
reviewed several reports concerning the issue as to whether investors
prefer paper disclosures. According to a recent FINRA report, investor
preference was almost evenly split between paper delivery (36 percent)
and electronic delivery (33 percent) in 2018. The share of investors
who prefer paper delivery has declined considerably since 2015,
however, while the share of investors who prefer electronic delivery
has increased.\127\ (This study is based on a survey of investors who
hold nonretirement accounts.) According to a different study performed
in 2019, almost half of 401(k) plan participants (49 percent) preferred
reviewing 401(k) account information through their 401(k) provider's
website, while 13 percent preferred a hard copy of account
information.\128\ Even the eldest group studied (70 and older)
preferred a 401(k) provider website (40 percent) to direct mail (31
percent).\129\ Similarly, other studies found that participants prefer
to receive communications related to their benefits through electronic
media such as personal emails or websites.\130\ Based on these studies,
the Department reasonably believes that the final rule generally lines
up with most participants' preferences. And since participants retain
the right to opt out of electronic delivery, those who prefer paper
disclosures are adequately protected under the final rule.
---------------------------------------------------------------------------
 \127\ See Investors in the United States, A Report of the
National Financial Capability Study, FINRA Investor Foundation,
December 2019, p. 1, https://www.usfinancialcapability.org/downloads/NFCS_2018_Inv_Survey_Full_Report.pdf. (A survey of 2,000
investors shows that, in 2015, 49 percent preferred paper delivery,
while 27 percent preferred electronic delivery).
 \128\ U.S. Retirement End-Investor 2019, Driving Participant
Outcomes with Financial Wellness Programs, Cerulli Report, 2019, at
18.
 \129\ Id.
 \130\ See Boosting the Effectiveness of Retirement Plan
Communications, Empower Institute, January 2019, at 9, https://docs.empower-retirement.com/Empower/institute/Effective-Communication.pdf. See also What Your Employees Think About Your
Benefits Communication, The Jellyvision Lab, 2016, at 12, https://www.jellyvision.com/wp-content/uploads/Survey-Report_What-Your-Employees-Think-About-Your-Benefits-Communication.pdf.
---------------------------------------------------------------------------
(vi) Benefits
 The final rule will not require plan administrators to develop new
formats or content beyond what is required in printed form.
Nonetheless, some plan administrators may elect to develop new formats
and content for electronic disclosures. Such formats could include more
interactive content, with hotlinks and multimedia presentations, which
might improve the quality and accessibility of information. DC account
information often is available continuously and updated in real-time,
which may help participants to effectively manage their accounts. Using
assistive technology, such as screen readers, electronic disclosures
could be made more accessible to the visually impaired. Online
translation may help covered individuals with limited English skills
better understand their disclosures. Some plans may provide mobile apps
with interactive features, which will allow participants to navigate
the site and conduct account transactions with ease.
 Some commenters predicted that the final rule might contribute to
higher retirement savings. According to these commenters, digitally
engaged participants or those with electronic delivery have, on
average, higher deferral rates and larger account balances than their
counterparts who are not digitally engaged or receive paper
disclosures. These commenters seem to attribute this higher retirement
savings to electronic delivery. This interpretation, however, requires
some caution. Participants who are more motivated to save are also more
likely to actively use their plan's website than other participants.
This self-selection, with the most motivated savers being the most
digitally engaged, may explain their higher deferral rates and larger
account balances. One study acknowledged this possibility, yet still
contended that electronic delivery could nudge investors towards
increased savings.\131\ The Department agrees that participants can be
nudged to save more as they interact more with various website tools
and gain more financial knowledge. The Department is encouraged to find
that many plan administrators now offer on their websites various
financial education tools, including retirement income planning tools
and budgeting tools. However, it is difficult to compare the relative
impacts on retirement savings of nudging participants (through
electronic delivery and digital engagement) versus self-selection. To
the extent that electronic delivery increases retirement savings and
better prepares participants for retirement, this rule will produce
even greater benefits.
---------------------------------------------------------------------------
 \131\ See Quantria Strategies, supra note 99.
---------------------------------------------------------------------------
 Several commenters had varying opinions on how cost savings
generated by this rule would be distributed. Some commenters estimated
that the rule would generate significant cost savings, with most going
directly to participants. Others, however, expressed skepticism. Many
suggested participants would experience minimal benefit, particularly
because the Department does not require plan administrators to pass the
cost savings onto participants.
 Cost savings in theory could be retained by service providers as
profit, or passed on to plan sponsors or participants as lower
fees.\132\ The disposition of savings is uncertain, in part because in
the long run the savings' nominal incidence may differ from its
economic incidence. The Department believes that a large portion of the
savings will reach participants. Such savings are additional to the
benefits participants may realize from improvements in the quality and
accessibility of disclosures.
---------------------------------------------------------------------------
 \132\ Instead of lowering fees, cost savings can be passed on to
plan sponsors or to participants in the form of augmented services.
---------------------------------------------------------------------------
 Competition among service providers can ensure cost savings to
benefit plan sponsors and participants, in the form of lower fees. One
commenter stated that 4,694 establishments offered third-party
administrative services in 2016. She described the market as having a
high volume of entry and exit, and high concentration.\133\ The
commenter estimated that, because of the competitive environment,
[[Page 31917]]
approximately 60 percent of cost savings would be passed to
participants in lower fees. (Stickiness in service provider
relationships in some cases may slow the flow of savings, however.
Large 401(k) plan sponsors (with $250 million or more in assets) most
frequently identified ``10 years or longer'' when asked how long they
had been with current recordkeepers.\134\ Another study finds a similar
pattern: a majority of plan sponsors reported having been with their
current recordkeepers for 10 years or longer.\135\ )
---------------------------------------------------------------------------
 \133\ This commenter indicated that this estimate was based on
data from U.S. Census Bureau, County Business Patterns by Employment
Size Class, 2010-2016.
 \134\ Cerulli, supra note 128.
 \135\ 2019 Defined Contribution Benchmarking Survey Report,
Deloitte, 2019.
---------------------------------------------------------------------------
 Fees associated with disclosures sometimes are bundled into
investment costs, such as the fees internal to mutual funds on DC plan
menus. Savings from reductions in such fees generally will accrue to
participants. Other times, disclosure and other administrative fees are
charged separately. These charges sometimes are allocated to DC
participants' accounts, again suggesting that savings will accrue to
participants. Other times such separate charges may be allocated to
plan forfeiture accounts or paid directly by plan sponsors. In these
cases, savings may accrue to plan sponsors rather than directly to
participants. Such savings nonetheless may benefit participants in the
long run, for example if sponsors pass on savings in the form of richer
matching contributions or other means, in response to labor market
forces. Surveys and comments help illustrate how frequently common fee
arrangements may result in savings to participants.
 In one survey, one in three DC plan sponsors reported that
administrative fees are bundled into investment costs. This is a
smaller fraction than in 2015, when one-half of plan sponsors reported
using this arrangement.\136\ Another report identifies a similar
downward trend for bundled fee arrangements.\137\ Such bundled fees may
be less transparent than fees that are charged separately, so in some
cases service providers may be slower to pass on savings from this rule
by reducing such fees. Nonetheless, competition from other service
providers, including those offering both bundled and unbundled fee
arrangements, will put downward pressure on bundled fees, and savings
from reductions in such fees generally will accrue to participants.
---------------------------------------------------------------------------
 \136\ 2019 Defined Contribution Benchmarking Survey Report,
Deloitte, 2019, at 20. (In 2015, 50 percent of plan sponsors
reported to have this ``no additional fee'' arrangement, which has
declined to 33 percent in 2019.)
 \137\ U.S. Retirement Markets 2019, Looking Toward Holistic
Solutions for Participants and Plan Sponsors, Cerulli Report, 2019,
at 69.
---------------------------------------------------------------------------
 Other times administrative fees are charged separately. The most
common fee arrangement is a direct fee paid to the recordkeeper, one
survey found. A majority (52 percent) of plan sponsors had this
arrangement in 2019, up from 41 percent in 2015. An additional 15
percent used separate wrap fees or charges on investment.\138\ Separate
fees or charges generally are transparent and therefore likely to
promote competition, so it is likely that savings from this rule
largely will translate into reductions in such fees, benefitting plan
sponsors or participants.
---------------------------------------------------------------------------
 \138\ Deloitte, supra note 135, at 20.
---------------------------------------------------------------------------
 Separate administrative fees or charges often are allocated to DC
participants' accounts. In 2019, 57 percent of plan sponsors reported
that participants pay such fees either based on their account balances
(29 percent) or in equal amounts (28 percent).\139\ Under such
arrangements, savings will likely accrue to participants. Other times
such separate charges may be allocated to plan forfeiture accounts (6
percent) or paid directly by plan sponsors (25 percent), according to
the same survey.\140\ In these cases, savings may accrue to plan
sponsors rather than directly to participants. Such savings nonetheless
may benefit participants in the long run, for example if sponsors pass
on savings in the form of richer matching contributions or other means,
in response to labor market forces.
---------------------------------------------------------------------------
 \139\ Id.
 \140\ Id.
---------------------------------------------------------------------------
 Commenters offered different views on the costs of paper delivery
at the participant level and the amount that participants will save
from reducing those costs. Some commenters stated the costs of paper
delivery, per participant, were minimal, suggesting participants would
save little. Others took the opposite view, asserting that savings from
electronic delivery would significantly increase participants' account
balances. One commenter suggested that a participant in a 401(k) plan
receives, on average, 6 to 8 documents per year and the average cost to
print and mail a single notice is $0.83. Assuming this is true, mailing
disclosures to participants costs between $4.98 and $6.64 per year. If
after eliminating these costs, 60 percent of the cost savings flow to
participants, as one commenter suggests, participants on average would
save $3 to $4 each year.
 A recent study estimated that the per-participant direct fee for
recordkeeping services was, on average, $54 in 2019, up from $50 in
2017.\141\ Then, eliminating recordkeeping fees would save participants
about 6 to 7 percent of direct fees that they pay to
recordkeepers.\142\ Some commenters characterized this savings as
minimal. Others suggested the savings could be considerable, especially
for young and newly enrolled participants, who will benefit most from
the compounding effects.
---------------------------------------------------------------------------
 \141\ Id. at 5. But according to a different, the average
recordkeeping/administration costs per participant was $35 in 2017
(see Stephen Miller, 401(k) Sponsors Focus on Benchmarking--and
Lowering--Fees (Feb. 22, 2018), https://www.shrm.org/resourcesandtools/hr-topics/benefits/pages/401k-fee-benchmarking.aspx.).
 \142\ These are calculated by ($3/$54) and ($4/$54)
respectively. If the average recordkeeping/administration costs per
participant were $35, as one study suggested, participants would
save approximately 9 to 11 percent of direct fees. These are
calculated by ($3/$35) and ($4/$35).
---------------------------------------------------------------------------
(4) Regulatory Alternatives
 To conform with Executive Order 12866, the Department considered
several regulatory approaches while developing this final rule.
(i) Covering Welfare Benefit Plan Disclosures
 As discussed in section (B)(2)(ii), the Department received
numerous comments about whether to expand this final rule to cover
health and welfare plans. After careful analysis and lengthy
deliberation, the Department decided not to expand the rule at this
time. The Department is reviewing the information provided in response
to its RFI, and will continue to explore this option and may undertake
rulemaking in the future. The Department has decided to take this two-
step approach so that retirement plans can accrue cost savings without
delay and to give the Department more time to analyze unique issues
about health and welfare plans. Extending the scope of the final rule
to health and welfare plans raises unique challenges regarding the tri-
agency consultation process that warrant careful consideration.
Accordingly, the Department intends to take more time, obtain public
comments, and develop a rule that can maximize benefits to health and
welfare plans and participants as part of a future project.
(ii) Conforming With Electronic Delivery Approaches Adopted by Other
Agency
 Executive Order 13847 directed the Department to coordinate with
the Treasury Department to explore expanding electronic delivery. The
goal of expanding electronic delivery is to
[[Page 31918]]
improve the effectiveness of disclosures and to reduce their associated
costs and burdens. Following discussions with Treasury Department
staff, the Department considered adopting an approach similar to that
of 26 CFR 1.401(a)-21, the IRS rule for electronic disclosures.\143\
This rule generally provides that a plan may use an electronic medium
to provide applicable notices only for a participant who affirmatively
consents to receive the notice electronically or who has the
``effective ability to access'' the electronically delivered
notice.\144\ A number of parties have encouraged the Department to
adopt this approach, which they believed to be more flexible than the
Department's 2002 safe harbor.\145\ The final rule does not adopt 26
CFR 1.401(a)-21(c) verbatim, but it does, however, align with the
regulation in large part. The Department considers this a logical
outcome, because plan administrators have to comply with requirements
of both ERISA and the Code. Thus, the more coordination and alignment
among potentially overlapping regulatory requirements, the less
regulatory burden overall.
---------------------------------------------------------------------------
 \143\ The Treasury Department and the IRS have issued a series
of guidance on electronic disclosures, beginning with IRS Notice 99-
1, and more recently in 26 CFR 1.401(a)-21(c) (2006), on the ``Use
of Electronic Media for Providing Employee Benefit Notices and
Making Employee Benefit Elections and Consents.'' See e.g., Notice
99-1 (1999-2 I.R.B. 8); Announcement 99-6 (1999-4 I.R.B. 24); T.D.
8873, 65 FR 6001 (Feb. 8, 2000); and T.D. 9294, 71 FR 61877 (Oct.
20, 2006).
 \144\ See 26 CFR 1.401(a)-21(b) and (c) (2006).
 \145\ See Written Statement of Michael Hadley, Partner, Davis &
Harman LLP, to the ERISA Advisory Council (June 7, 2017), at 8,
https://www.dol.gov/sites/dolgov/files/EBSA/about-ebsa/about-us/erisa-advisory-council/2017-mandated-disclosure-for-retirement-plans-hadley-written-statement-06-07.pdf; see also Written Statement
of David N. Levine and Brigen L. Winters, Principals, Groom Law
Group (June 7, 2017), at 4, https://www.dol.gov/sites/dolgov/files/EBSA/about-ebsa/about-us/erisa-advisory-council/2017-mandated-disclosure-for-retirement-plans-levine-and-winters-written-statement-06-07.pdf.
---------------------------------------------------------------------------
(iii) Keeping a Quarterly Pension Benefit Statement in a Single Annual
Combined NOIA
 In the final rule, the Department revised the group of covered
documents for which a single annual combined NOIA is permitted. In
contrast to the proposal, under the final rule some covered documents,
such as a quarterly pension benefit statement, can no longer be
furnished with a single annual combined NOIA.\146\ The Department
considered keeping the quarterly pension benefit statement as one of
the disclosures that can be included in a single annual combined NOIA.
Pension benefit statements must be furnished on a quarterly basis for
participant-directed individual account plans, such as 401k plans.
Thus, if an annual combined NOIA is emailed at the beginning of the
year, some participants may not appreciate that subsequent quarterly
statements also will be made available online. Furthermore, quarterly
benefit statements can prompt participants to take actions, such as
checking their account balances, increasing deferral rates, or
reallocating investments. With one notice at the beginning of the year,
covered individuals may less frequently check their accounts and make
changes accordingly. In the Department's view, this may have
detrimental impacts on participants' retirement savings, although it
may bring administrative costs down slightly. Therefore, the Department
determined that the approach taken in the final rule is a more balanced
approach that provides sufficient protection for participants while
generating substantial cost savings.
---------------------------------------------------------------------------
 \146\ An SMM is another document excluded from a single annual
combined NOIA.
---------------------------------------------------------------------------
(5) Paperwork Reduction Act
 In accordance with the Paperwork Reduction Act of 1995 (PRA 95) (44
U.S.C. 3506(c)(2)(A)), the Department solicited comments on its new
alternative safe harbor to use electronic media to satisfy the general
furnishing requirement under Title 1 of ERISA. At the same time, the
Department also submitted an information collection request (ICR) to
OMB, in accordance with 44 U.S.C. 3507(d). The Department received no
comment that specifically addressed the paperwork burden analysis of
the information collections. The Department did, however, receive
comments on costs and administrative burdens related to the proposal.
The Department reviewed the comments and took them into account when
making changes to the final rule, analyzing the economic impact of the
proposal, and developing the revised paperwork burden analysis
summarized below.
 In connection with the new rule, the Department is submitting an
ICR to OMB requesting approval of a revised collection of information
under OMB Control Number 1210-0121. The Department will notify the
public when OMB approves the ICR.
 A copy of the ICR may be obtained by contacting the PRA addressee
shown below or at https://www.RegInfo.gov.
 PRA Addressee: Address requests for copies of the ICR to James
Butikofer, Office of Policy and Research, U.S. Department of Labor,
Employee Benefits Security Administration, 200 Constitution Avenue NW,
Room N-5718, Washington, DC 20210. Telephone: (202) 693-8410; Fax:
(202) 219-5333. These are not toll-free numbers. ICRs submitted to OMB
also are available at https://www.RegInfo.gov.
 As discussed above, the final regulation will create two new
information collections that are subject to the PRA: The annual NOIA
(29 CFR 2520.104b-31(d)(2)) and the initial notification (29 CFR
2520.104b-31(g)). The final rule will also reduce costs for some of the
Department's existing information collections.
 The Department is unaware of any data source that would directly
identify the number of plans that will decide to use the final new
alternative safe harbor. Therefore, for purposes of this analysis, the
Department conservatively assumes that all plans will use the final
alternative safe harbor for at least some of their covered individuals.
As discussed in the Cost Savings section above, the Department
estimates that plan administrators using the final rule will incur a
one-time start-up cost to prepare and distribute the annual NOIA and
the initial notification. The final rule's impact on the hour and cost
burden associated with the Department's information collections are
discussed below.
 Agency: Employee Benefits Security Administration, Department of
Labor.
 Title: Consent to receive employee benefit plan disclosures
electronically.
 Type of Review: Revision of currently approved collection of
information.
 OMB Control Number: 1210-0121.
 Affected Public: Individuals or households; Business or other for-
profit; Not-for-profit institutions.
 Respondents: 710,000.
 Responses: 109,440,000.
 Estimated Total Burden Hours: 2,388,000.
 Estimated Total Costs: $44,737,000.
 On April 9, 2002, the Department published a notice of final
rulemaking on electronic communication and recordkeeping technologies
to establish a safe harbor for electronic disclosures.\147\ The 2002
safe harbor generally covers disclosures under Title I. The final
regulation also covered the receipt of required disclosures at
locations other than the workplace. The 2002 safe harbor requires that
plan administrators to obtain affirmative consent, in advance, before
distributing electronic disclosures to participants and beneficiaries
outside the workplace.\148\ In order to gain consent, the plan
administrator must provide a
[[Page 31919]]
clear and conspicuous statement that includes the following: The types
of documents to which the consent would apply; that consent may be
withdrawn at any time; the procedures for withdrawing consent and
updating necessary information; the right to obtain a paper copy, free
of charge; and any hardware and software requirements.
---------------------------------------------------------------------------
 \147\ 67 FR 17263 (April 9, 2002).
 \148\ This requirement is incorporated at 29 CFR 2520.104b-
1(c)(2)(ii)(A), (B), and (C).
---------------------------------------------------------------------------
 The Department revises this information collection by adding the
information collections required under the final rule to the 2002 safe
harbor. This will increase the number of respondents by 710,000, the
responses by 109,440,000, the hour burden by 2,388,000, and the cost
burden by $44,737,000.
 The final rule will affect the Department's burden estimates for
several existing information collections of covered disclosures.
Specifically, the rule will reduce the burden associated with the
following covered disclosures with information collections covered by
the PRA: The SPD, the SMM, the SAR, the annual funding notice,
disclosures for participant-directed individual account plans under
ERISA section 404(a)(5), and the QDIA notice. The burden reduction
estimates are based on the current cost and hour burdens for the
Department's existing ICRs for the covered disclosures, adjusted for
the number of plans and participants the Department assumes will use
electronic disclosures. The Department discusses these ICRs and its
revised estimates below. The Department has submitted the revised
information collections for these covered disclosures to OMB for
review, in accordance with 44 U.S.C. 3507(d).
 Agency: Employee Benefits Security Administration, Department of
Labor.
 Title: Summary Plan Description Requirements under the ERISA.
 Type of Review: Revised Collection.
 OMB Control Number: 1210-0039.
 Affected Public: Businesses or other for-profits, Not-for-profit
institutions.
 Respondents: 3,033,000.
 Responses: 112,733,000.
 Estimated Total Burden Hours: 163,000.
 Estimated Total Costs: $235,556,000.
 Description: Section 104(b) of ERISA requires the employee benefit
plan administrators furnish participants and certain beneficiaries with
an SPD that describes, in language understandable to an average plan
participant, the benefits, rights, and obligations of participants in
the plan. The SPD information requirements are set forth in section
102(b) of ERISA. To the extent there is a material modification in the
terms of the plan or a change in the required content of the SPD,
section 104(b)(1) of ERISA requires plan administrators to furnish
participants and certain beneficiaries with an SMM or summary of
material reductions (SMR).\149\ The Department has issued regulations
providing guidance on compliance with the requirements to furnish SPDs,
SMMs, and SMRs. These regulations, codified at 29 CFR 2520.102-2,
2520.102-3, 29 CFR 2520.104b-2, and 29 CFR 2520.104b-3, contain
information collections for which the Department has obtained OMB
approval under OMB Control No. 1210-0039.
---------------------------------------------------------------------------
 \149\ Because SMRs apply only to health plans, not retirement
plans, they will not be affected by this new safe harbor.
 The Department estimates that the final alternative safe harbor
will reduce the hour burden by 126,000 and the cost burden by
$88,464,000.
 Agency: Employee Benefits Security Administration, Department of
Labor.
 Title: ERISA Summary Annual Report Requirement.
 Type of Review: Revised Collection.
 OMB Number: 1210-0040.
 Affected Public: Not-for-profit institutions, Businesses or other
for-profits.
 Respondents: 750,000.
 Responses: 166,350,000.
 Estimated Total Burden Hours: 1,185,000.
 Estimated Total Costs: $24,358,000.
 Description: ERISA Section 104(b)(3) and the regulation published
at 29 CFR 2520.104b-10 require, with certain exceptions, that plan
administrators furnish participants and certain beneficiaries with a
SAR. The regulation prescribes the content and format of the SAR and
the timing of its delivery. The SAR provides information about the
plan's current financial operation and condition. It also explains
participants' and beneficiaries' rights to receive further information
on these issues. EBSA previously submitted the ICR provisions in the
regulation at 29 CFR 2520.104b-10 to OMB, and OMB approved the ICR
under OMB Control No. 1210-0040.
 The Department estimates that the final alternative safe harbor
will reduce the hour burden by 607,000 and the cost burden by
$23,661,000.
 Agency: Employee Benefits Security Administration, Department of
Labor.
 Title: Annual Funding Notice for Defined Benefit Pension Plans.
 Type of Review: Amendment of a currently approved collection of
information.
 OMB Control Number: 1210-0126.
 Affected Public: Businesses or other for-profits, Not-for-profit
institutions.
 Respondents: 32,000.
 Responses: 65,527,000.
 Estimated Total Burden Hours: 197,000.
 Estimated Total Costs: $7,080,000.
 Description: Section 101(f) of the ERISA sets forth annual funding
notice requirements. Before 2006, the year the Pension Protection Act
(PPA) was enacted, section 101(f) applied only to multiemployer defined
benefit plans. The Department has issued multiple final regulations
with regard to this provision, most recently on February 2, 2015 (80 FR
5625). Section 501(a) of the PPA amended section 101(f) of ERISA to
change to the annual funding notice requirements. These amendments
require plan administrators of all defined benefit plans subject to
Title IV of ERISA to provide an annual funding notice to the Pension
Benefit Guaranty Corporation (PBGC); plan participants and
beneficiaries; labor organizations representing participants or
beneficiaries; and, in the case of a multiemployer plan, all plan
employers. The annual funding notice must include, among other things,
the plan's funding percentage, assets and liabilities, asset
allocation, and a description of the benefits under the plan that are
eligible to be guaranteed by the PBGC. The ICR was approved by OMB
under OMB Control Number 1210-0126.
 The Department estimates that the final alternative safe harbor
will reduce the hour burden by 454,000 and the cost burden by
$12,560,000.
 Agency: Employee Benefits Security Administration, Department of
Labor.
 Title: Disclosures for Participant Directed Individual Account
Plans.
 Type of Review: Revised Collection.
 OMB Control Number: 1210-0090.
 Affected Public: Businesses or other for-profits, Not-for-profit
institutions.
 Respondents: 566,000.
 Responses: 769,693,000.
 Estimated Total Burden Hours: 5,914,000.
 Estimated Total Costs: $223,980,000.
 Description: Plan administrators must provide plan- and investment-
related fee and expense information to participants and beneficiaries
in all participant-directed individual account plans (e.g., 401(k)
plans) for plan years beginning on or after January 1, 2011. The
Department previously requested review of this information collection
and obtained approval from OMB under OMB control number 1210-0090.
 The Department estimates that the final alternative safe harbor
will reduce the hour burden by 979,000 and the cost burden by
$46,360,000.
[[Page 31920]]
 Agency: Employee Benefits Security Administration, Department of
Labor.
 Title: Default Investment Alternatives under Participant Directed
Individual Account Plans.
 Type of Review: Revised collection.
 OMB Control Number: 1210-0132.
 Affected Public: Not-for-profit institutions, Businesses or other
for-profits.
 Respondents: 297,000.
 Responses: 39,549,000.
 Estimated Total Burden Hours: 76,000.
 Estimated Total Burden Costs: $2,074,000.
 Description: Section 404(c) of ERISA states that participants or
beneficiaries who can hold individual accounts under their pension
plans and exercise control over the assets ``as determined in
regulations of the Secretary [of Labor]'' will not be treated as
fiduciaries of the plan. Moreover, plan fiduciaries are not liable for
any loss resulting from the participants' or beneficiary's exercise of
control over their individual account assets.
 The PPA amended ERISA section 404(c) by adding paragraph (c)(5)(A).
The new paragraph requires that participants who fail to make
investment elections be treated as having exercised control over their
account assets, so long as the plan provides appropriate notice and
invests the assets ``in accordance with regulations prescribed by the
Secretary [of Labor].'' As required under ERISA section 404(c)(5)(A),
the Department issued a final regulation on the types of investment
vehicles that plan fiduciaries may choose as a QDIA. The regulation
also outlines two information collection requirements. First, it
implements the statutory requirement that a fiduciary must provide
annual notices to participants and beneficiaries whose account assets
could be invested in a QDIA. Second, the regulation requires
fiduciaries to pass certain pertinent materials they receive relating
to a QDIA to those participants and beneficiaries with assets invested
in the QDIA as well to provide certain information on request. The ICRs
are approved under OMB Control Number 1210-0132.
 The Department estimates that due to fiduciaries' use of the final
alternative safe harbor to provide disclosures to participants who
currently are receiving them by mail, the hour burden will be reduced
by 117,000 and the cost burden will be reduced by $9,135,000.
(6) Regulatory Flexibility Act
 The Regulatory Flexibility Act (RFA) \150\ imposes certain
requirements on rules subject to the notice and comment requirements of
section 553(b) of the Administrative Procedure Act.\151\ Under section
604 of the RFA, agencies must submit a final regulatory flexibility
analysis (FRFA) for proposals that are likely to have a significant
economic impact on a substantial number of small entities. Small
entities include small businesses, organizations, and governmental
jurisdictions.
---------------------------------------------------------------------------
 \150\ 5 U.S.C. 601 (2012).
 \151\ 5 U.S.C. 551 (2012).
---------------------------------------------------------------------------
 For purposes of analysis under the RFA, the Employee Benefits
Security Administration (EBSA) considers an employee benefit plan with
fewer than 100 participants a small entity.\152\ This definition is
based on section 104(a)(2) of ERISA, which permits the Secretary of
Labor to prescribe simplified annual reports for pension plans that
cover fewer than 100 participants. Under section 104(a)(3), the
Secretary may also provide for exemptions or simplified annual
reporting and disclosure for welfare benefit plans. Pursuant to section
104(a)(3), the Department has previously issued simplified reporting
provisions and limited exemptions from reporting/disclosure
requirements for small plans, including unfunded or insured welfare
plans covering fewer than 100 participants and satisfying certain other
requirements.\153\
---------------------------------------------------------------------------
 \152\ The Department consulted with the Small Business
Administration Office of Advocacy in making this determination as
required by 5 U.S.C. 603(c) and 13 CFR 121.903(c).
 \153\ See 29 CFR 2520.104-20 (2012), 29 CFR 2520.104-21 (2012),
29 CFR 2520.104-41 (2012), 29 CFR 2520.104-46 (2012), and 29 CFR
2520.104b-10 (2012).
---------------------------------------------------------------------------
 Further, while some large employers may have small plans, small
employers generally maintain small plans. Thus, EBSA believes that
assessing the impact of this final rule on small plans is an
appropriate substitute for evaluating the effect on small entities. The
definition of small entity considered appropriate for this purpose
differs, however, from a definition of small business that is based on
size standards promulgated by the Small Business Administration (SBA)
\154\ pursuant to the Small Business Act.\155\ EBSA requested comments
on the appropriateness of the size standard used to evaluate the impact
of the proposed rule on small entities and received no comment on this
issue. In particular, the Department did not receive any comment
stating that it is inappropriate to use size standards different from
those promulgated by the SBA.
---------------------------------------------------------------------------
 \154\ 13 CFR 121.201 (2011).
 \155\ 15 U.S.C. 631 (2013).
---------------------------------------------------------------------------
 The Department has determined that this final rule will
significantly impact a substantial number of small entities: Employee
benefit plans with fewer than 100 participants. The Department's FRFA
follows.
(i) Need for and Objectives of the Rule
 Pursuant to section 505 of ERISA, the Secretary of Labor has broad
authority ``to prescribe such regulations as he finds necessary or
appropriate to carry out the provisions of [Title I] of ERISA.'' The
final rule offers a voluntary, alternative method for electronic
disclosures and, thus, reduces the costs and burdens of related to
required disclosures. The final rule will reduce the cost of printing
and mailing covered disclosures, benefitting plans regardless of the
size. Therefore, the Department expects the final rule to deliver
benefits to the participants of many small plans and their families, as
well as the plans themselves.
(ii) Affected Small Entities
 The majority of private retirement plans are small plans with fewer
than 100 participants. The 2017 Form 5500 filings show that out of
total 710,000 private retirement plans, approximately 87 percent, or
619,000, of ERISA-covered retirement plans were small plans with fewer
than 100 participants.\156\ However, small plans cover only a fraction
of total participants. In 2017, over 137 million individuals
participated in private retirement plans. Out of these 137 million
participants, over 12 million participants, less than 10 percent, were
in small plans. The Department estimates that slightly more than half
already receive disclosures electronically. The remaining half will
likely receive electronic disclosures under this final rule.
---------------------------------------------------------------------------
 \156\ Private Pension Plan Bulletin 2016, Employee Benefits
Security Administration, Department of Labor.
---------------------------------------------------------------------------
(iii) Projected Reporting, Recordkeeping, and Other Compliance
Requirements
 As discussed above, by allowing more participants who access
disclosures online, the final rule will save retirement plans,
including small plans, money. These cost savings can in turn be used to
defray other plan-related expenses, and thus lower the overall fees
charged to participants. In addition, modern technology features may
help participants with disabilities or limited English skills better
understand the content of disclosures, which will allow
[[Page 31921]]
them to better manage their plan accounts. Both large and small plans
will benefit from the cost savings and other benefits that result from
wider use of electronic disclosure.
 This final rule is a voluntary safe harbor. Therefore, plan
administrators will not be required to make any specific disclosures
available on a website. This final rule simply provides an additional,
optional method for plan administrators to deliver covered disclosures
to participants and beneficiaries electronically and does not change
any underlying reporting, disclosure, and recordkeeping requirements.
Therefore, the Department does not believe this final rule will impose
any additional compliance requirements on small entities.
(iv) Duplicate, Overlapping, or Relevant Federal Rules
 The final rule will provide retirement plan administrators with an
alternative method to furnish covered disclosures electronically. In
developing this alternative, the Department consulted with other
relevant regulators, including the Treasury Department and the SEC. The
Treasury Department has interpretive jurisdiction over certain notices
relating to pension plans covered by Title 1 of ERISA, but the covered
disclosures under the final rule are exclusively in the jurisdiction of
the Labor Department. The SEC has jurisdiction over issuers of
investment products that often are used as ERISA employee retirement
plan investments as well as some service providers to ERISA-covered
plans, but it has no jurisdiction over ERISA-covered pension plans.
(v) Significant Alternatives Considered
 The RFA directs the Department to consider significant alternatives
that would accomplish the stated objective, while minimizing any
significant adverse impact on small entities. As discussed above, the
Department expects this final rule to save money for small and large
plans by eliminating materials, printing, and mailing costs.
 The Department considered keeping the quarterly pension benefit
statement as one of the disclosures that can be included in a single
annual combined NOIA. Pension benefit statements must be furnished
quarterly for participant-directed individual account plans, such as
401k plans. Thus, if a single annual combined NOIA is emailed at the
beginning of the year, some participants may not appreciate that
subsequent quarterly statements will also be made available online.
Furthermore, quarterly benefit statements can prompt participants to
take actions such as checking their account balances, increasing
deferral rates, or reallocating investments. With one single notice at
the beginning of the year, participants may less frequently check their
accounts and make changes accordingly. In the Department's view, this
may have detrimental impacts on participants' retirement savings,
although it may bring costs down. Therefore, the Department determines
that the approach taken in the final rule is more balanced, protecting
participants while saving money.
 Small plans, like large plans, will incur costs associated with
emailing NOIAs and addressing invalid or inoperable electronic
addresses quarterly, rather than annually. The Department, however,
does not believe this burden will be disproportionally borne by small
plans because small plans, having fewer participants, will have fewer
electronic addresses to manage and an easier time updating electronic
addresses due to the proximity between administrators and participants.
The Department, thus, determines that this approach does not
disadvantage nor unduly burden small plans.
 Paragraph (e) of the final rule requires plan administrators to
ensure the existence of a website at which covered individuals can
access covered documents. In the proposed rule, the Department
solicited comments regarding the fraction of plans, particularly small
plans, that would need to develop or modify a website in order to rely
on this new safe harbor. The Department was particularly concerned
about any potential disproportionate burden on small plans that this
condition may inadvertently impose. One commenter suggested that small
plans are less likely to have their own websites. In addition, one
study suggests that slightly more than a quarter (27 percent) of small
profit sharing and 401(k) plans (plans with fewer than 50 participants)
did not provide any services via internet, whereas only 10 percent of
large profit sharing and 401(k) plans (plans with 5,000 participants or
more) did not provide any services via internet in 2017.\157\ In part
to mitigate any potential negative impact on small plans, the
Department added a new paragraph, paragraph (k), in the final rule and
allows plan administrators to furnish covered documents directly by
email as an alternative to the notice and access approach. Therefore, a
plan administrator that does not have a website can rely on this new
safe harbor to provide electronic disclosure without developing a
website. The Department believes this change in the final rule will
help more small plan administrators electronically deliver plan-related
documents, reducing the administrative burden on small plans.
---------------------------------------------------------------------------
 \157\ See Plan Sponsors Council of America, supra note 109.
(Because the Department expects most 401(k) plans to have their own
websites, the fraction of small defined benefit plans and non-
participant-directed defined contribution plans that lack websites
will likely be higher than that of small 401(k) plans.)
---------------------------------------------------------------------------
(7) Unfunded Mandates Reform Act
 Title II of the Unfunded Mandates Reform Act of 1995 \158\ requires
each federal agency to prepare a written statement assessing the
effects of any federal mandate in a final rule that may result in an
expenditure of $100 million or more (adjusted annually for inflation
with the base year 1995) in any one year by state, local, and tribal
governments, in the aggregate, or by the private sector. For purposes
of the Unfunded Mandates Reform Act, as well as Executive Order 12875,
this final rule does not include any federal mandate that will result
in such expenditures. This is because the final rule merely provides an
alternative, optional safe harbor for pension benefit plans subject to
ERISA to use electronic media to furnish required disclosures to
participants and beneficiaries.
---------------------------------------------------------------------------
 \158\ Public Law 104-4, 109 Stat. 48 (1995).
---------------------------------------------------------------------------
(8) Federalism Statement
 Executive Order 13132 outlines fundamental principles of
federalism. E.O. 13132 requires federal agencies to follow specific
criteria in forming and implementing policies that have ``substantial
direct effects'' on the states, the relationship between the national
government and states, or on the distribution of power and
responsibilities among the various levels of government. Federal
agencies promulgating regulations that have federalism implications
must consult with state and local officials and describe the extent of
their consultation and the nature of the concerns of state and local
officials in the preamble to the final rule.
 In the Department's view, this final regulation does not have
federalism implications because it does not have a direct effect on the
states, the relationship between the national government and the
states, or on the distribution of power and responsibilities among
various levels of government.
[[Page 31922]]
List of Subjects in 29 CFR Parts 2520 and 2560
 Employee benefit plans, Pensions.
 For the reasons stated in the preamble, the Department of Labor
amends 29 CFR parts 2520 and 2560 as follows:
PART 2520--RULES AND REGULATIONS FOR REPORTING AND DISCLOSURE
0
1. The authority citation for part 2520 continues to read as follows:
 Authority: 29 U.S.C. 1021-1025, 1027, 1029-1031, 1059, 1134 and
1135; and Secretary of Labor's Order 1-2011 77 FR 1088 (Jan. 9,
2012). Sec. 2520.101-2 also issued under 29 U.S.C. 1132, 1181-1183,
1181 note, 1185, 1185a-b, 1191, and 1191a-c. Secs. 2520.102-3,
2520.104b-1 and 2520.104b-3 also issued under 29 U.S.C. 1003, 1181-
1183, 1181 note, 1185, 1185a-b, 1191, and 1191a-c. Secs. 2520.104b-1
and 2520.107 also issued under 26 U.S.C. 401 note, 111 Stat. 788.
Sec. 2520.101-5 also issued under sec. 501 of Pub. L. 109-280, 120
Stat. 780, and sec. 105(a), Pub. L. 110-458, 122 Stat. 5092.
0
2. Amend Sec. 2520.101-3 by revising paragraph (b)(3) to read as
follows:
Sec. 2520.101-3 Notice of blackout periods under individual account
plans.
* * * * *
 (b) * * *
 (3) Form and manner of furnishing notice. The notice required by
paragraph (a) of this section shall be in writing and furnished to
affected participants and beneficiaries in any manner consistent with
the requirements of Sec. 2520.104b-1 of this chapter, including Sec.
2520.104b-1(c) or Sec. 2520.104b-31 of this chapter relating to the
use of electronic media.
* * * * *
0
3. Amend Sec. 2520.104b-1 by revising paragraph (c)(1) introductory
text and adding paragraph (f) to read as follows:
Sec. 2520.104b-1 Disclosure.
* * * * *
 (c) * * *
 (1) Except as otherwise provided by applicable law, rule or
regulation, including the alternative methods for disclosure through
electronic media in paragraph (f) of this section, the administrator of
an employee benefit plan furnishing documents through electronic media
is deemed to satisfy the requirements of paragraph (b)(1) of this
section with respect to an individual described in paragraph (c)(2) of
this section if:
* * * * *
 (f) Alternative disclosure through electronic media. As an
alternative to electronic media disclosure obligations in paragraph (c)
of this section, the administrator of an employee benefit plan is
deemed to satisfy the requirements of paragraph (b)(1) of this section,
provided that the administrator complies with the obligations in 29 CFR
2520.104b-31.
0
4. Add Sec. 2520.104b-31 to subpart F to read as follows:
Sec. 2520.104b-31 Alternative method for disclosure through
electronic media--Notice-and-access.
 (a) Alternative method for disclosure through electronic media--
Notice-and-access. As an alternative to Sec. 2520.104b-1(c), the
administrator of an employee benefit plan satisfies the general
furnishing obligation in Sec. 2520.104b-1(b)(1) with respect to
covered individuals and covered documents, provided that the
administrator complies with the notice, access, and other requirements
of paragraphs (b) through (k) of this section, as applicable.
 (b) Covered individual. For purposes of this section, a ``covered
individual'' is a participant, beneficiary, or other individual
entitled to covered documents and who--when he or she begins
participating in the plan, as a condition of employment, or otherwise--
provides the employer, plan sponsor, or administrator (or an
appropriate designee of any of the foregoing) with an electronic
address, such as an electronic mail (``email'') address or internet-
connected mobile-computing-device (e.g., ``smartphone'') number, at
which the covered individual may receive a written notice of internet
availability, described in paragraph (d) of this section, or an email
described in paragraph (k) of this section. Alternatively, if an
electronic address is assigned by an employer to an employee for
employment-related purposes that include but are not limited to the
delivery of covered documents, the employee is treated as if he or she
provided the electronic address.
 (c) Covered documents. For purposes of this section, a ``covered
document'' is:
 (1) Pension benefit plans. In the case of an employee pension
benefit plan, as defined in section 3(2) of the Act, any document or
information that the administrator is required to furnish to
participants and beneficiaries pursuant to Title I of the Act, except
for any document or information that must be furnished only upon
request.
 (2) [Reserved]
 (d) Notice of internet availability--(1) General. The administrator
must furnish to each covered individual a notice of internet
availability for each covered document in accordance with the
requirements of this section.
 (2) Timing of notice of internet availability. A notice of internet
availability must be furnished at the time the covered document is made
available on the website described in paragraph (e) of this section.
However, if an administrator furnishes a combined notice of internet
availability for more than one covered document, as permitted under
paragraph (i) of this section, the requirements of this paragraph
(d)(2) are treated as satisfied if the combined notice of internet
availability is furnished each plan year, and, if the combined notice
of internet availability was furnished in the prior plan year, no more
than 14 months following the date the prior plan year's notice was
furnished.
 (3) Content of notice of internet availability. (i) A notice of
internet availability furnished pursuant to this section must contain
the information set forth in paragraphs (d)(3)(i)(A) through (H) of
this section:
 (A) A prominent statement--for example as a title, legend, or
subject line--that reads: ``Disclosure About Your Retirement Plan.''
 (B) A statement that reads: ``Important information about your
retirement plan is now available. Please review this information.''
 (C) An identification of the covered document by name (for example,
a statement that reads: ``your Quarterly Benefit Statement is now
available'') and a brief description of the covered document if
identification only by name would not reasonably convey the nature of
the covered document.
 (D) The internet website address, or a hyperlink to such address,
where the covered document is available. The website address or
hyperlink must be sufficiently specific to provide ready access to the
covered document and will satisfy this standard if it leads the covered
individual either directly to the covered document or to a login page
that provides, or immediately after a covered individual logs on
provides, a prominent link to the covered document.
 (E) A statement of the right to request and obtain a paper version
of the covered document, free of charge, and an explanation of how to
exercise this right.
 (F) A statement of the right, free of charge, to opt out of
electronic delivery and receive only paper versions of covered
documents, and an explanation of how to exercise this right.
[[Page 31923]]
 (G) A cautionary statement that the covered document is not
required to be available on the website for more than one year or, if
later, after it is superseded by a subsequent version of the covered
document.
 (H) A telephone number to contact the administrator or other
designated representative of the plan.
 (ii) A notice of internet availability furnished pursuant to this
section may contain a statement as to whether action by the covered
individual is invited or required in response to the covered document
and how to take such action, or that no action is required, provided
that such statement is not inaccurate or misleading.
 (4) Form and manner of furnishing notice of internet availability.
A notice of internet availability must:
 (i) Be furnished electronically to the address referred to in
paragraph (b) of this section;
 (ii) Contain only the content specified in paragraph (d)(3) of this
section, except that the administrator may include pictures, logos, or
similar design elements, so long as the design is not inaccurate or
misleading and the required content is clear;
 (iii) Be furnished separately from any other documents or
disclosures furnished to covered individuals, except as permitted under
paragraph (i) of this section; and
 (iv) Be written in a manner calculated to be understood by the
average plan participant.
 (e) Standards for internet website. (1) The administrator must
ensure the existence of an internet website at which a covered
individual is able to access covered documents.
 (2) The administrator must take measures reasonably calculated to
ensure that:
 (i) The covered document is available on the website no later than
the date on which the covered document must be furnished under the Act;
 (ii) The covered document remains available on the website at least
until the date that is one year after the date the covered document is
made available on the website pursuant to paragraph (e)(2)(i) of this
section or, if later, the date it is superseded by a subsequent version
of the covered document;
 (iii) The covered document is presented on the website in a manner
calculated to be understood by the average plan participant;
 (iv) The covered document is presented on the website in a widely-
available format or formats that are suitable to be both read online
and printed clearly on paper;
 (v) The covered document can be searched electronically by numbers,
letters, or words; and
 (vi) The covered document is presented on the website in a widely-
available format or formats that allow the covered document to be
permanently retained in an electronic format that satisfies the
requirements of paragraph (e)(2)(iv) of this section.
 (3) The administrator must take measures reasonably calculated to
ensure that the website protects the confidentiality of personal
information relating to any covered individual.
 (4) For purposes of this section, the term website means an
internet website, or other internet or electronic-based information
repository, such as a mobile application, to which covered individuals
have been provided reasonable access.
 (f) Right to copies of paper documents or to opt out of electronic
delivery. (1) Upon request from a covered individual, the administrator
must promptly furnish to such individual, free of charge, a paper copy
of a covered document. Only one paper copy of any covered document must
be provided free of charge under this section.
 (2) Covered individuals must have the right, free of charge, to
globally opt out of electronic delivery and receive only paper versions
of covered documents. Upon request from a covered individual, the
administrator must promptly comply with such an election.
 (3) The administrator must establish and maintain reasonable
procedures governing requests or elections under paragraphs (f)(1) and
(2) of this section. The procedures are not reasonable if they contain
any provision, or are administered in a way, that unduly inhibits or
hampers the initiation or processing of a request or election.
 (4) The system for furnishing a notice of internet availability
must be designed to alert the administrator of a covered individual's
invalid or inoperable electronic address. If the administrator is
alerted that a covered individual's electronic address has become
invalid or inoperable, such as if a notice of internet availability
sent to that address is returned as undeliverable, the administrator
must promptly take reasonable steps to cure the problem (for example,
by furnishing a notice of internet availability to a valid and operable
secondary electronic address that had been provided by the covered
individual, if available, or obtaining a new valid and operable
electronic address for the covered individual) or treat the covered
individual as if he or she made an election under paragraph (f)(2) of
this section. If the covered individual is treated as if he or she made
an election under paragraph (f)(2) of this section, the administrator
must furnish to the covered individual, as soon as is reasonably
practicable, a paper version of the covered document identified in the
undelivered notice of internet availability.
 (g) Initial notification of default electronic delivery and right
to opt out. The administrator must furnish to each individual, prior to
the administrator's reliance on this section with respect to such
individual, a notification on paper that covered documents will be
furnished electronically to an electronic address; identification of
the electronic address that will be used for the individual; any
instructions necessary to access the covered documents; a cautionary
statement that the covered document is not required to be available on
the website for more than one year or, if later, after it is superseded
by a subsequent version of the covered document; a statement of the
right to request and obtain a paper version of a covered document, free
of charge, and an explanation of how to exercise this right; and a
statement of the right, free of charge, to opt out of electronic
delivery and receive only paper versions of covered documents, and an
explanation of how to exercise this right. A notification furnished
pursuant to this paragraph (g) must be written in a manner calculated
to be understood by the average plan participant.
 (h) Special rule for severance from employment. At the time a
covered individual who is an employee, and for whom an electronic
address assigned by an employer pursuant to paragraph (b) of this
section is used to furnish covered documents, severs from employment
with the employer, the administrator must take measures reasonably
calculated to ensure the continued accuracy and availability of such
electronic address or to obtain a new electronic address that enables
receipt of covered documents following the individual's severance from
employment.
 (i) Special rule for annual combined notices of internet
availability. Notwithstanding the requirements in paragraphs (d)(4)(ii)
and (iii) of this section, an administrator may furnish one notice of
internet availability that incorporates or combines the content
required by paragraph (d)(3) of this section with respect to one or
more of the following:
 (1) A summary plan description, as required pursuant to section
104(a) of the Act;
 (2) Any covered document or information that must be furnished
[[Page 31924]]
annually, rather than upon the occurrence of a particular event, and
does not require action by a covered individual by a particular
deadline;
 (3) Any other covered document if authorized in writing by the
Secretary of Labor, by regulation or otherwise, in compliance with
section 110 of the Act; and
 (4) Any applicable notice required by the Internal Revenue Code if
authorized in writing by the Secretary of the Treasury.
 (j) Reasonable procedures for compliance. The conditions of this
section are satisfied, notwithstanding the fact that the covered
documents described in paragraph (b) of this section are temporarily
unavailable for a reasonable period of time in the manner required by
this section due to technical maintenance or unforeseeable events or
circumstances beyond the control of the administrator, provided that:
 (1) The administrator has reasonable procedures in place to ensure
that the covered documents are available in the manner required by this
section; and
 (2) The administrator takes prompt action to ensure that the
covered documents become available in the manner required by this
section as soon as practicable following the earlier of the time at
which the administrator knows or reasonably should know that the
covered documents are temporarily unavailable in the manner required by
this section.
 (k) Alternative method for disclosure through email systems.
Notwithstanding any other provision of this section, an administrator
satisfies the general furnishing obligation in Sec. 2520.104b-1(b)(1)
by using an email address to furnish a covered document to a covered
individual, provided that:
 (1) The covered document is sent to a covered individual's email
address, referred to in paragraph (b) of this section, no later than
the date on which the covered document must be furnished under the Act.
 (2) In lieu of furnishing a notice of internet availability
pursuant to paragraph (d) of this section, the administrator sends an
email pursuant to this paragraph (k) that:
 (i) Includes the covered document in the body of the email or as an
attachment;
 (ii) Includes a subject line that reads: ``Disclosure About Your
Retirement Plan'';
 (iii) Includes the information described in paragraph (d)(3)(i)(C)
of this section if the covered document is an attachment
(identification or brief description of the covered document),
paragraphs (d)(3)(i)(E) (statement of right to paper copy of covered
document), (d)(3)(i)(F) (statement of right to opt out of electronic
delivery), and (d)(3)(i)(H) (a telephone number) of this section; and
 (iv) Complies with paragraph (d)(4)(iv) of this section (relating
to readability).
 (3) The covered document is:
 (i) Written in a manner reasonably calculated to be understood by
the average plan participant;
 (ii) Presented in a widely-available format or formats that are
suitable to be read online, printed clearly on paper, and permanently
retained in an electronic format that satisfies the preceding
requirements in this sentence; and
 (iii) Searchable electronically by numbers, letters, or words.
 (4) The administrator:
 (i) Takes measures reasonably calculated to protect the
confidentiality of personal information relating to the covered
individual; and
 (ii) Complies with paragraphs (f) (relating to copies of paper
documents or the right to opt out); (g) (relating to the initial
notification of default electronic delivery), except for the cautionary
statement; and (h) (relating to severance from employment) of this
section.
 (l) Dates; severability. (1) This section is applicable July 27,
2020.
 (2) If any provision of this section is held to be invalid or
unenforceable by its terms, or as applied to any person or
circumstance, or stayed pending further agency action, the provision
shall be construed so as to continue to give the maximum effect to the
provision permitted by law, unless such holding shall be one of
invalidity or unenforceability, in which event the provision shall be
severable from this section and shall not affect the remainder thereof.
PART 2560--RULES AND REGULATIONS FOR ADMINISTRATION AND ENFORCEMENT
0
5. The authority citation for part 2560 continues to read as follows:
 Authority: 29 U.S.C. 1132, 1135, and Secretary of Labor's Order
1-2011, 77 FR 1088 (Jan. 9, 2012). Section 2560.503-1 also issued
under 29 U.S.C. 1133. Section 2560.502c-7 also issued under 29
U.S.C. 1132(c)(7). Section 2560.502c-4 also issued under 29 U.S.C.
1132(c)(4). Section 2560.502c-8 also issued under 29 U.S.C.
1132(c)(8).
0
6. Amend Sec. 2560.503-1 by revising the second sentence of paragraph
(g)(1) introductory text and the second sentence of paragraph (j)(1) to
read as follows:
Sec. 2560.503-1 Claims procedure.
* * * * *
 (g) * * *
 (1) * * * Any electronic notification shall comply with the
standards imposed by 29 CFR 2520.104b-1(c)(1)(i), (iii), and (iv), or
with the standards imposed by 29 CFR 2520.104b-31 (for pension benefit
plans). * * *
* * * * *
 (j) * * *
 (1) * * * Any electronic notification shall comply with the
standards imposed by 29 CFR 2520.104b-1(c)(1)(i), (iii), and (iv), or
with the standards imposed by 29 CFR 2520.104b-31 (for pension benefit
plans). * * *
* * * * *
 Signed at Washington, DC, May 15, 2020.
Eugene Rutledge,
Assistant Secretary, Employee Benefits Security Administration,
Department of Labor.
[FR Doc. 2020-10951 Filed 5-21-20; 8:45 am]
BILLING CODE 4510-29-P