Plan Communication is Key
Two recent events remind us about the importance of plan communication. Plans subject to ERISA must be documented by a written plan document. Participants of the plan must be given a summary of that plan document, known as a summary plan description. There are many other types of plan communications that are very important. How these communications are delivered is equally important.
The Department of Labor (DOL) allows the use of modern technology, such as electronic distribution, for distributing plan communications but only if the method of delivery results in actual receipt of the documents by plan participants (these requirements are set forth in 29 CFR 2520.104b-1(c)). It should be noted that the requirements for electronic distribution are far more onerous if the individual does not have regular employment-based access to the employer’s system. In a recent DOL fiduciary webinar, the DOL underscored the importance of distinguishing between furnishing the document, which is what ERISA requires, and simply making it available.
Similarly, a recent court decision (Thomas v. CIGNA Group Ins., 2015 WL 893534 (E.D.N.Y. 2015) highlights this point. The question in this matter related to posting a document on a company’s intranet. According to this court, as bolstered by the DOL, posting a document on an intranet, while perfectly permissible, does not satisfy the distribution obligation. The obligation to distribute the document requires the document be actually furnished.
A document can be furnished electronically to plan participants in several ways. For example, the document could be e-mailed; the document could be attached to an e-mail; or a link to the document could be included in an e-mail; however, in all instances, with appropriate explanation of the importance of the document and how to access it. Again, posting a document on an intranet is fine as an additional method of communication; but it, in and of itself, does not satisfy the obligation to furnish the document.
The information contained in this article is provided as general guidance and may be affected by changes in law or regulation. This article is not intended to replace or substitute for accounting or other professional advice. Please consult a CBIZ professional. This information is provided as-is with no warranties of any kind. CBIZ shall not be liable for any damages whatsoever in connection with its use and assumes no obligation to inform the reader of any changes in laws or other factors that could affect the information contained herein.