“How do you keep it all straight?” I get this question frequently as I have three very busy kids: in addition to school activities, two play soccer, two play softball, two take dance lessons, and one plays baseball. We used to print off multiple calendars to keep track of who needed to be picked up, where, and at what time. However, we’ve since branched out to using the electronic calendar app on our mobile phones – wastes less paper and ensures everyone gets to where they need to be.
Delivering ERISA-required retirement plan information to participants can be difficult to keep straight, too. It can also be time consuming and expensive. You might be experiencing your own case of “who needs what and when.” Thankfully, a simpler way to communicate has taken root.
The use of e-mail and other electronic methods for delivering required plan information is growing exponentially.
This type of communication may simplify the disclosure process, provide more reliable information delivery, and possibly reduce plan administration costs over time. However, there’s still confusion among plan sponsors about when it’s ok to use electronic participant communication and disclosures versus the traditional paper method.
Take a look at this decision tree for guidance in determining when it’s allowed. You might be surprised to know that communications like quarterly benefit statements and some investment information can be delivered electronically.
It’s not all or nothing. There’s no requirement that all participants have to receive notices in the same manner. For example, active participants may receive notices electronically even if other participants cannot. Use the decision tree exercise for all participant types (active, retired/terminated, beneficiaries, alternate payees) to see what works for your business.
Keep in mind, regardless of the method chosen for electronic delivery, participants must (upon request) be given the opportunity to receive paper copies of the information.
For more information regarding the electronic requirements and alternatives for delivery, the Principal Financial Group® has provided a thought capital piece entitled “Electronic Delivery of Participant Disclosure Materials,” which discusses the delivery alternatives and important monitoring requirements in greater detail.
As for me, while using an electronic calendar to keep our schedule straight doesn’t totally solve the issue of having three kids going three different directions, it has been much easier for me to manage my work/life balance. Now, if I could only remember the snacks…
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The subject matter in this communication is provided with the understanding that The Principal® is not rendering legal, accounting, or tax advice. You should consult with appropriate counsel or other advisors on all matters pertaining to legal, tax, or accounting obligations and requirements.
Insurance products and plan administrative services are provided by Principal Life Insurance Company a member of the Principal Financial Group® (The Principal®), Des Moines, IA 50392.
© 2014 Principal Financial Services, Inc.