[Federal Register Volume 91, Number 37 (Wednesday, February 25, 2026)]
[Proposed Rules]
[Pages 9213-9237]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2026-03723]
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DEPARTMENT OF LABOR
Employee Benefits Security Administration
29 CFR Parts 2520 and 2560
RIN 1210-AC27
Requirement To Provide Paper Statements in Certain Cases--
Amendments to Electronic Disclosure Safe Harbors
AGENCY: Employee Benefits Security Administration, Department of Labor.
ACTION: Proposed rule.
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SUMMARY: The Department of Labor (Department) is proposing narrow
amendments to two separate electronic disclosure safe harbors for
purposes of implementing section 338 of the SECURE 2.0 Act of 2022
(SECURE 2.0). Taken together, the two existing safe harbors permit the
broad use of electronic disclosure under prescribed conditions for the
furnishing of required disclosures under Title I of the Employee
Retirement Income Security Act of 1974 (ERISA). Section 338 of SECURE
2.0 amended section 105(a)(2) of ERISA to require retirement plans to
provide paper benefit statements in certain cases. Section 338 also
instructed the Department to update its electronic disclosure safe
harbors in connection with the statutory changes. The proposed
amendments would implement these Congressional mandates.
DATES: Comments on the proposal must be submitted on or before April
27, 2026.
ADDRESSES: You may submit written comments, identified by RIN 1210-AC27
to either of the following addresses:
Federal eRulemaking Portal: https://www.regulations.gov.
Follow the instructions for submitting comments.
Mail: Office of Regulations and Interpretations, Employee
Benefits Security Administration, Room N-5655, U.S. Department of
Labor, 200 Constitution Avenue NW, Washington, DC 20210, Attention:
Requirement to Provide Paper Statements in Certain Cases--Amendments to
Electronic Disclosure Safe Harbors, RIN 1210-AC27.
Instructions: All submissions received must include the agency name
and Regulatory Identifier Number (RIN) for this rulemaking. Persons
submitting comments electronically are encouraged not to submit paper
copies. Comments will be available to the public, without charge,
online at https://www.regulations.gov and https://www.dol.gov/agencies/ebsa and at the Public Disclosure Room, Employee Benefits Security
Administration, Suite N-1513, 200 Constitution Avenue NW, Washington,
DC 20210. We encourage commenters to include supporting facts,
research, and evidence in their comments. When doing so, commenters are
encouraged to provide citations to the published materials referenced,
including active hyperlinks. Likewise, commenters who reference
materials which have not been published are encouraged to upload
relevant data collection instruments, data sets, and detailed findings
as a part of their comment. Providing such citations and documentation
will assist us in analyzing the comments.
Warning: Do not include any personally identifiable or confidential
business information that you do not want publicly disclosed. Comments
are public records posted on the internet as received and can be
retrieved by most internet search engines.
FOR FURTHER INFORMATION CONTACT: Saliha Z. Moore or Rebecca Davis,
Office of Regulations and Interpretations, Employee Benefits Security
Administration, (202) 693-8500. This is not a toll-free number.
SUPPLEMENTARY INFORMATION:
I. Background
A. ERISA Disclosures
Title I of ERISA requires that pension and welfare plans furnish
numerous written notices and disclosures to participants and
beneficiaries. Plans must furnish some disclosures by operation of law,
including disclosures required annually or upon a specific triggering
event. Plans must furnish other disclosures upon request. ERISA's
general standard for delivery is that plan administrators must use
``measures reasonably calculated to ensure actual receipt of the
material by plan participants [and] beneficiaries.'' \1\ Historically,
delivery of disclosures was in person or in paper through the mail to
the person's home address.
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\1\ 29 CFR 2520.104b-1(b)(1).
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B. Periodic Pension Benefits Statements
One of ERISA's disclosures required by the operation of law is the
periodic pension benefit statement. Section 105(a)(1) of ERISA requires
administrators of pension benefit plans that are not one-participant
retirement plans to provide periodic ``pension benefit statements'' (as
described in section 105(a)(2) of ERISA) to participants and certain
beneficiaries. Defined contribution plans that permit participants and
beneficiaries to direct their own investments (participant-directed)
must furnish pension benefit statements at least once each quarter.
Defined contribution plans that do not permit participants and
beneficiaries to direct their own investments (non-participant
directed) must furnish pension benefit statements at least once each
year. In the case of defined benefit plans, pension benefit statements
generally must be provided to participants who have a nonforfeitable
accrued benefit and who are employed by the plan sponsor at least once
every three years. Section 105(a)(2) of ERISA requires a pension
benefit statement to indicate the participant's or beneficiary's total
benefits accrued, among other information.
C. The 2002 Electronic Disclosure Safe Harbor Regulation
The Department has codified two safe harbor regulations that permit
plan administrators to furnish required documents through electronic
media.\2\
[[Page 9214]]
Together, these safe harbors allow a wide range of disclosures to be
furnished electronically to participants and beneficiaries; the
Department currently assumes 96.1% of participants and beneficiaries
receive some of their required ERISA disclosures electronically.\3\ The
first electronic safe harbor was published in 2002 (the 2002 safe
harbor).\4\ The 2002 safe harbor establishes tailored safeguards for
electronic disclosure for two categories of participants and
beneficiaries. The first category is for participants whose employment
duties enable them to effectively access electronically furnished
disclosures as an integral part of their jobs--so called ``wired-at-
work'' individuals. The other category established by the 2002 safe
harbor consists of individuals who give (and do not withdraw)
affirmative consent to the receipt of electronically furnished
disclosures. The latter category of individuals has a right under the
2002 safe harbor to fully opt out of electronic delivery by withdrawing
their consent. Although wired-at-work individuals have the right to
receive a paper version of a disclosure on request, they do not have
the right to opt out of electronic delivery altogether under the 2002
safe harbor.
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\2\ The Department of the Treasury and the Internal Revenue
Service have also issued rules permitting the use of electronic
media to provide applicable notices and make participant elections
required under the Internal Revenue Code. See generally Treas. Reg.
Sec. 1.401(a)-21.
\3\ The Department estimates approximately 96.1% of participants
receive disclosures electronically under the combined effects of the
2002 electronic disclosures safe harbor and the 2020 electronic safe
harbor. The Department estimates that 58.3% of participants will
receive electronic disclosures under the 2002 safe harbor. According
to the National Telecommunications and Information Agency (NTIA),
37.4% of individuals age 25 and over have access to the internet at
work. According to a Greenwald & Associates survey, 84.0% of plan
participants find it acceptable to make electronic delivery the
default option, which is used as the proxy for the number of
participants who will not opt-out of electronic disclosure that are
automatically enrolled (for a total of 31.4% receiving electronic
disclosure at work). Additionally, the NTIA reports that 44.1% of
individuals age 25 and over have access to the internet outside of
work. According to a Pew Research Center survey, 61.0% of internet
users use online banking, which is used as the proxy for the number
of internet users who will affirmatively consent to receiving
electronic disclosures (for a total of 26.9% receiving electronic
disclosure outside of work). Combining the 31.4% who receive
electronic disclosure at work with the 26.9% who receive electronic
disclosure outside of work produces a total of 58.3%. The remaining
41.7% of participants are subject to the 2020 safe harbor. According
to the 2022 American Community Survey, 91.2% of the population has
an internet subscription. The Department estimates that 0.5% of
electronic disclosures will bounce back and will need to be sent as
a paper disclosure. Accordingly, for the 41.7% of participants not
affected by the 2002 safe harbor, 90.7%, or an additional 37.8%
(41.7% x 90.7%), are estimated to receive electronic disclosures
under the 2020 safe harbor. In total, the Department estimates that
96.1% (58.3% + 37.8%) would receive electronic disclosures.
\4\ 29 CFR 2520.104b-1(c).
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D. The 2020 Electronic Disclosure Safe Harbor Regulation Alternative
The Department established a second regulatory safe harbor as an
alternative to the 2002 safe harbor in 2020 (the 2020 safe harbor).\5\
The 2020 safe harbor allows plans to adopt default electronic
disclosure of covered documents for individuals who have provided a
valid electronic address (e.g., an email address or a smartphone
number) to the plan sponsor, including individuals who are employed by
the plan sponsor and have been given an employer-assigned electronic
address. This safe harbor depends on the existence of a valid
electronic address and does not operate based on whether individuals
are wired-at-work or have given their affirmative consent. This safe
harbor is designed to facilitate two specific methods of modern
electronic disclosure. The first method is the ``notice-and-access''
model, an example of which is an email that notifies the recipient that
information is available on continuous access website, with a hyperlink
to the site. The second method is a simple email that contains the
required disclosure content in the body of the email itself or as an
attachment. Prior to using either method under this safe harbor, plans
must send an initial paper notice to individuals informing them that
they will begin to receive electronic disclosures in the future and of
their right to opt out without cost. This safe harbor was developed, in
part, in response to criticism that certain aspects of the 2002 safe
harbor are ambiguous, cumbersome, and outdated. Unlike the 2002 safe
harbor, the 2020 safe harbor is expressly limited to pension benefit
plans.
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\5\ 29 CFR 2520.104b-31.
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E. Section 338 of SECURE 2.0
Section 338(a) of SECURE 2.0 amended section 105(a)(2) of ERISA by
adding subparagraph (E), which requires, subject to two exceptions
discussed below, disclosure of certain pension benefit statements on
paper. Under new subparagraph (E) of section 105(a)(2) of ERISA,
defined contribution plans must furnish at least one pension benefit
statement on paper in any calendar year, and defined benefit plans
generally must furnish at least one paper pension benefit statement
every three calendar years.\6\ The terms ``defined contribution plans''
and ``defined benefit plans'' refer to plans that are not one-
participant retirement plans. Accordingly, participant-directed defined
contribution plans that satisfy one of the Department's two safe
harbors may provide three (of the required four) pension benefit
statements electronically during the year. Additionally, the first
exception in new subparagraph (E) of section 105(a)(2) of ERISA exempts
plans from the paper requirement if the plan uses the 2002 safe harbor.
The second exception exempts plans from the paper requirement if
individuals request electronic delivery and statements are so
delivered. The paper benefit statement requirement added by SECURE 2.0
is effective for plan years beginning after December 31, 2025.
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\6\ Subparagraph (E) of section 105(a)(2) of ERISA as amended by
SECURE 2.0 Act of 2022, Sec. 338(a), Public Law 117-328, 136 Stat.
5373 (Dec. 29, 2022), provides in the relevant part: ``With respect
to at least 1 pension benefit statement furnished for a calendar
year with respect to an individual account plan under paragraph
(1)(A), and with respect to at least 1 pension benefit statement
furnished every 3 calendar years with respect to a defined benefit
plan under paragraph (1)(B), such statement shall be furnished on
paper in written form[.]'' ERISA Sec. 105(a)(2)(E) will be
applicable with respect to plan years beginning after December 31,
2025.
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In conjunction with this amendment of section 105(a)(2) of ERISA,
an uncodified portion of section 338 of SECURE 2.0 directed the
Department to make certain changes to both the 2002 and 2020 electronic
disclosure safe harbor regulations. The statutory directive leaves much
of the Department's safe harbor framework in place, and the changes
that are being proposed are discussed below in detail.
F. 2023 Request for Information--SECURE 2.0 Reporting and Disclosure
On August 11, 2023, the Department published a Request for
Information (RFI) to begin developing a public record for several
provisions of SECURE 2.0, including section 338.\7\ The RFI asked three
questions (19-21) to gather input on options for implementing section
338 of SECURE 2.0. Several ideas and suggestions submitted were well
beyond the scope of the directive in section 338. Other ideas and
suggestions, however, are addressed by the framework set forth in this
notice of proposed rulemaking. The responses to the RFI are available
on the Department's website.\8\
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\7\ 88 FR 54511 (Aug. 11, 2023).
\8\ https://www.dol.gov/agencies/ebsa/laws-and-regulations/rules-and-regulations/public-comments/1210-AC23.
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[[Page 9215]]
II. Explanation of Proposed Amendments to 2002 Electronic Disclosure
Safe Harbor Regulation--29 CFR 2520.104b-1(c)
A. Section 338(b)(1) of SECURE 2.0
Section 338(b)(1) of SECURE 2.0 directs the Department to update
the 2002 safe harbor with respect to plans that will use the 2002 safe
harbor to furnish a pension benefit statement electronically that is
otherwise required by new subparagraph (E) of section 105(a)(2) of
ERISA to be furnished on paper. Specifically, the safe harbor must be
updated to require that, with respect to participants who first become
eligible to participate and beneficiaries who first become eligible for
benefits after December 31, 2025, plans must send, prior to the
electronic delivery of any pension benefit statement, a one-time
initial notice on paper informing recipients ``of their right to
request that all documents required to be disclosed under title I of
[ERISA] be furnished on paper in written form.''
B. Initial Paper Notice Explaining Global Opt-Out Right
The proposal would implement the statutory directive in section
338(b)(1) of SECURE 2.0 by modifying paragraph (c)(1)(iv) of the 2002
safe harbor to provide that, for pension benefit plans that elect to
furnish the pension benefit statement described in subparagraph (E) of
section 105(a)(2) of ERISA by electronic delivery rather than on paper,
the administrators of such plans must furnish to participants who first
become eligible to participate, and beneficiaries who first become
eligible for benefits, after December 31, 2025, a one-time initial
notice on paper in written form, prior to the electronic delivery of
any pension benefit statement. This one-time notice must notify
applicable participants and beneficiaries of their right to request
that all documents required to be disclosed by the plan under Title I
of ERISA be furnished on paper in written form. This one-time notice
may help emphasize to new participants and beneficiaries that the plan
(subject to the conditions in the safe harbors) will furnish many
disclosures electronically.
Paragraph (c)(1)(iv) of the proposal narrowly implements the
directive contained in section 338(b)(1) of SECURE 2.0. For instance,
the initial notice requirement and related global opt-out right in
paragraph (c)(1)(iv) of the proposal covers only those individuals who
first become eligible to participate and beneficiaries who first become
eligible for benefits after December 31, 2025, and not those with such
eligibility status before that date. In addition, the initial notice
requirement is required only if a retirement plan administrator
furnishes the pension benefit statement required under subparagraph (E)
of section 105(a)(2) of ERISA by electronic delivery, rather than on
paper, using the 2002 safe harbor as permitted by subparagraph (E)(i)
of section 105(a)(2) of ERISA. Thus, if a retirement plan furnishes, on
paper, the pension benefit statement described in subparagraph (E) of
section 105(a)(2), the administrator of that plan would not be subject
to the initial notice requirement in paragraph (c)(1)(iv) of the
proposal, even if all other documents required to be disclosed under
Title I of ERISA are furnished electronically using the 2002 safe
harbor. The Department requests comments on the scope of paragraph
(c)(1)(iv) of the proposal.
Paragraph (c)(3)(ii) of the proposal contains a modification to
coordinate the safe harbor's existing advance statement requirement,
which is applicable only with respect to those individuals covered
under the safe harbor based on their affirmative consent to receive
disclosures electronically, with the new initial notice requirement in
paragraph (c)(1)(iv) of the proposal. Coordination is needed because
the content of the former overlaps with the latter and absent
coordination between the two provisions, the safe harbor would require
two advance disclosures with duplicative information. Specifically, the
new initial notice must inform individuals of their right to request
that all documents required to be disclosed under Title I be furnished
on paper. Similarly, the existing advance statement must include a
statement that the individual can withdraw their consent to receive
electronic disclosures at any time, as well as the procedures for doing
so. For these individuals, withdrawing their consent to receive
electronic disclosures would mean that all documents required to be
disclosed under Title I would be furnished on paper, and is thus
effectively the same as a request for paper disclosures. Because of
this overlap, the proposal adds new paragraph (c)(3) that would permit
the existing advance statement to satisfy the initial notice
requirement (but only if the advance statement is furnished on paper).
The Department believes that, in effect, the new initial notice will
thus almost exclusively be provided to wired-at-work participants, as
participants and beneficiaries who have given their affirmative consent
will likely receive the advance statement on paper instead. The
Department requests comments on the coordination of the new initial
notice and existing advance statement in proposed paragraph (c)(3).
The proposal would make a minor conforming adjustment to the 2002
safe harbor to accommodate the addition of the new initial notice
requirement in paragraph (c)(1)(iv) of the proposal. Specifically, the
proposal would move the requirement currently in paragraph (c)(1)(iv)
of the safe harbor into the end of paragraph (c)(1)(iii) of the
proposal. The Department does not intend to effect any substantive
change with this conforming adjustment.
III. Explanation of Proposed Amendments to 2020 Electronic Disclosure
Safe Harbor Regulation--29 CFR 2520.104b-31
A. Section 338(b)(2)(A)-(E) of SECURE 2.0
Section 338(b)(2) of SECURE 2.0 contains several directives with
respect to the Department's ``applicable guidance governing electronic
disclosure'' other than the 2002 electronic disclosure safe harbor. For
purposes of implementing these directives in this proposed rulemaking,
the Department considers ``applicable guidance governing electronic
disclosure'' as referring to the electronic disclosure safe harbor
codified at 29 CFR 2520.104b-31, entitled ``Alternative method for
disclosure through electronic media--Notice-and-access,'' published in
May 2020.\9\ Each of the directives are discussed below, and the
Department's proposed implementation of each directives are laid out in
the five sections below.
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\9\ 85 FR 31884 (May 27, 2020).
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Section 338(b)(2)(A) of SECURE 2.0 contains the first of the
directives. The provision, in relevant part, directs the Department to
update the 2020 safe harbor to the extent necessary to ensure that
retirement plans using the safe harbor permit a participant or
beneficiary ``the opportunity to request that any disclosure required
to be delivered on paper under applicable guidance by the Department of
Labor shall be furnished by electronic delivery.''
Section 338(b)(2)(B) of SECURE 2.0 contains the second of the
directives. The provision, in relevant part, directs the Department to
update the 2020 safe harbor to the extent necessary to ensure that each
paper statement furnished by the plan pursuant to subparagraph (E) of
section 105(a)(2) of ERISA ``include an explanation of how to request
that all such statements, and any other
[[Page 9216]]
document required to be disclosed under title I of the Employee
Retirement Income Security Act of 1974, be furnished by electronic
delivery.'' The directive also provides that each paper statement shall
include contact information for the plan sponsor, including a telephone
number.
Section 338(b)(2)(C) of SECURE 2.0 contains the third of the
directives. The provision, in relevant part, directs the Department to
update the 2020 safe harbor to the extent necessary to ensure that a
plan using the 2020 safe harbor ``may not charge any fee to a
participant or beneficiary for the delivery of any paper statements.''
Section 338(b)(2)(D) of SECURE 2.0 contains the fourth of the
directives. The provision, in relevant part, directs the Department to
update the 2020 safe harbor to the extent necessary to ensure that
``each document required to be disclosed that is furnished by
electronic delivery under such a plan shall include an explanation of
how to request that all such documents be furnished on paper in written
form.''
Section 338(b)(2)(E) of SECURE 2.0 contains the fifth of the
directives. The provision, in relevant part, directs the Department to
update the 2020 safe harbor to the extent necessary to ensure that ``a
plan is permitted to furnish a duplicate electronic statement in any
case in which the plan furnishes a paper pension benefit statement.''
B. Exclusion of Paper Benefit Statements From Scope of Safe Harbor
Paragraph (c) of the current 2020 safe harbor defines the full list
of documents covered by that safe harbor. All these documents may be
furnished by the electronic methods described in the safe harbor if all
other conditions of the safe harbor are satisfied. Coverage under
paragraph (c) of the current safe harbor includes all pension benefit
statements required under section 105 of ERISA that must be furnished
automatically by operation of law.
The proposal would amend paragraph (c)(1) of the current 2020 safe
harbor to exclude, from the list of documents that may be furnished
electronically, the mandatory paper pension benefit statements
described in subparagraph (E) of section 105(a)(2) of ERISA. As a
general rule, these statements always must be furnished on paper. But
the proposal would continue to cover pension benefit statements not
required to be furnished on paper under the new mandate, i.e., benefits
statements other than those described in subparagraph (E) of section
105(a)(2) of ERISA. For example, the safe harbor would continue to
cover the other three benefit statements per year that must be
furnished by a participant-directed individual account plan. In
addition, retirement plans would also be able to use the notice-and-
access model or email delivery method described in the 2020 safe harbor
to furnish electronically the benefit statements described in
subparagraph (E) of section 105(a)(2) of ERISA that would have
otherwise been required on paper except that participants and
beneficiaries elected to exercise the option described in subparagraph
(E)(ii) of section 105(a)(2) of ERISA to request electronic delivery
instead of paper.
C. Opportunity To Request Electronic Delivery of Benefit Statement in
Lieu of Paper Benefit Statement
The proposed rulemaking would relocate the existing provisions of
paragraph (l) of the current 2020 safe harbor to paragraph (m) and
replace such provisions with a new paragraph (l), implementing section
338(b)(2) of SECURE 2.0. Specifically, paragraph (l)(1) of the proposal
implements paragraph 338(b)(2)(A) by providing that, with respect to a
plan that discloses covered documents electronically under the 2020
safe harbor, covered individuals are permitted the opportunity to
request that pension benefit statements required to be furnished on
paper under subparagraph (E) of section 105(a)(2) of ERISA instead be
furnished by electronic delivery.
Paragraph (l)(1) of the proposal is limited to pension benefit
statements required under subparagraph (E) of section 105(a)(2) of
ERISA despite section 338(b)(2)(A)'s broader reference to ``any
disclosure required to be delivered on paper under applicable guidance
by the Department of Labor.'' The Department considers this limitation
to be reasonable and appropriate because, other than the initial
notification described in paragraph (g) of the 2020 safe harbor, the
benefit statement required by subparagraph (E) of section 105(a)(2) of
ERISA is the only other retirement plan document under Title I of ERISA
that is required to be delivered on paper under applicable guidance
governing electronic disclosure by the Department. The Department
requests comments on the scope of paragraph (l)(1) of the proposal.
D. Paper Pension Benefit Statement Must Explain Opportunity To Request
Electronic Delivery in Lieu of Paper Benefit Statement
Paragraph (l)(2) of the proposal implements section 338(b)(2)(B) of
SECURE 2.0 by adding to the 2020 safe harbor a special rule that
conditions the use of the 2020 safe harbor on specific content being
added to the paper pension benefit statement described in subparagraph
(E) of section 105(a)(2) of ERISA. Specifically, paragraph (l)(2)(i)
provides that, with respect to a plan that discloses covered documents
electronically under the safe harbor, each pension benefit statement
furnished on paper as required under subparagraph (E) of section
105(a)(2) of ERISA shall include an explanation of how to request that
all such statements be furnished by electronic delivery.
Paragraph (l)(2)(i) of the proposal generally carries forward the
language directly from section 338(b)(2)(B) of SECURE 2.0 without
modification. The proposal limits the scope of paragraph (l)(2)(i) to
pension benefit statements. The Department believes this scope is
appropriate because this paragraph only applies to plans already
furnishing nearly all disclosures electronically using the 2020 safe
harbor. Thus, the only disclosures these plans are likely providing on
paper to individuals who have not opted out of electronic disclosure,
outside of the initial notification described in paragraph (g) of the
2020 safe harbor, are the benefit statements described in subparagraph
(E) of section 105(a)(2) of ERISA. Therefore, to receive all
disclosures electronically, an individual only needs to request that
these benefit statements be furnished electronically rather than on
paper. Additionally, this limitation thus would align the scope of
paragraph (l)(2) with the scope of paragraph (l)(1) of the proposed
regulation which is also limited to the benefit statements described in
subparagraph (E) of section 105(a)(2) of ERISA. The Department believes
alignment of the two interrelated provisions, in terms of scope, would
avoid confusion and is beneficial for administration and ease of
compliance. As with paragraph (l)(1) of the proposal, the Department
requests comments on the scope of proposed paragraph (l)(2) and the
interrelationship between the two provisions.
Paragraph (l)(2)(ii) of the proposal implements the requirement in
section 338(b)(2)(B)(ii) of SECURE 2.0 that the paper pension benefit
statement described in subparagraph (E) of section 105(a)(2) of ERISA
contain contact information for the plan sponsor. Specifically,
paragraph (l)(2)(ii) provides that, with respect to a plan that
discloses covered documents electronically under the safe harbor, each
pension benefit statement furnished on paper as required under
[[Page 9217]]
subparagraph (E) of section 105(a)(2) of ERISA shall include, in
addition to the explanation of how to request that all such statements
be furnished by electronic delivery, contact information for the plan
sponsor, plan administrator, or other designated representative of the
plan, including a telephone number.
Paragraph (l)(2)(ii) of the proposal provides flexibility by
permitting the inclusion of contact information for the plan sponsor,
plan administrator, or other designated representative of the plan.
While section 338(b)(2)(B)(ii) of SECURE 2.0 refers to only the plan
sponsor, the Department considers this flexibility to be in line with
ordinary administrative practices of retirement plans and thus within
the intent of the statute. Plan administrators and designated
representative of plans, such as third-party administrators and
recordkeepers, often play a more direct and central role in the
administrative process of furnishing disclosures to participants and
beneficiaries than the plan sponsor. The Department understands that it
may make more sense to include the contact information of the entity
that has a more hands-on role in furnishing disclosures than the plan
sponsor who may be the employer but who has no direct or indirect role
in the day-to-day administration of the plan. The Department requests
comments on the scope of paragraph (l)(2)(ii) of the proposal.
E. Prohibition on Fees
The proposed rulemaking makes two changes to implement section
338(b)(2)(C) of SECURE 2.0, which in relevant part, directs the
Department to update the 2020 safe harbor to the extent necessary to
ensure that a plan using the 2020 safe harbor may not charge any fee to
a participant or beneficiary for the delivery of any paper statements.
Paragraph (f)(1) of the 2020 safe harbor grants covered individuals
the right, free of charge, to paper copies on request of pension
benefit statements previously furnished electronically under the safe
harbor. However, only one paper copy of the same statement must be
provided free of charge on request under that paragraph. Additional
paper copies of the same benefit statement (e.g., a second, third, and
so on), if requested by covered individuals, may be subject to fees
under the 2020 safe harbor. The Department understands section
338(b)(2)(C) of SECURE 2.0 prohibits such fees.
Accordingly, the proposal would add a new paragraph (l)(3)
clarifying that plans that use the 2020 safe harbor to furnish covered
documents to covered individuals may not charge any fees to such
individuals for the delivery of any paper pension benefit statements
made on their requests pursuant to paragraph (f)(1) of the proposal.
The proposed rulemaking would also make an amendment to paragraph
(f)(1) of the 2020 safe harbor to conform to the new prohibition on
fees in paragraph (l)(3) of the proposal. Specifically, the second
sentence in paragraph (f)(1) of the proposal contains a new clause
``except for pension benefit statements as provided in paragraph (l)(3)
of this section.''
F. Explanation of How To Request Paper Documents
Section 338(b)(2)(D) of SECURE 2.0, in relevant part, directs the
Department to update the 2020 safe harbor to the extent necessary to
ensure that ``each document required to be disclosed that is furnished
by electronic delivery under such a plan shall include an explanation
of how to request that all such documents be furnished on paper in
written form.'' However, the proposal does not suggest amendments to
the safe harbor in response to this directive because the 2020 safe
harbor already satisfies this directive. Specifically, paragraph (f)(2)
of the 2020 safe harbor gives covered individuals the right to globally
opt out of electronic delivery and receive all covered documents in
paper form. Additionally, paragraph (g) requires plans to provide an
initial notice to covered individuals of their global opt out right and
an explanation of how to exercise this right, and paragraphs
(d)(3)(i)(F) and (k)(2)(iii) require plans to provide a similar
statement alongside each electronic disclosure. Therefore, an
additional statement within each document delivered electronically
would be unnecessary and duplicative.
G. Duplicate Electronic Statements
Section 338(b)(2)(E) of SECURE 2.0, in relevant part, directs the
Department to update the 2020 safe harbor to the extent necessary to
ensure that ``a plan is permitted to furnish a duplicate electronic
statement in any case in which the plan furnishes a paper pension
benefit statement.'' However, the proposal does not contain amendments
to the safe harbor in response to this directive because nothing in the
safe harbor regulation restricts a plan's ability to furnish a
duplicate electronic statement. The preamble to the 2020 safe harbor
explicitly makes this point.\10\ The Department requests comments on
whether, and in what circumstances, plans might deny duplicate
electronic statements to individuals on account of their preference for
the paper statement required under subparagraph (E) of section
105(a)(2) of ERISA.
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\10\ 85 FR 31884, 31899 (May 27, 2020) (``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.'').
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IV. Minor Conforming Technical Change to Claims Procedure Regulation 29
CFR 2560.503-1
The claims procedure regulation requires a minor amendment to align
with the proposed amendments to the 2002 safe harbor. The claims
procedure regulation at 29 CFR 2560.503-1(g)(1) and (j) states that an
electronic notification of an adverse benefit determination or denial
of an appeal must comply with either the 2002 or 2020 safe harbors. The
cross reference to the 2002 safe harbor specifically cites to paragraph
29 CFR 2520.104b-1(c)(1)(iv). As explained above, the Department is
proposing to move the current content from paragraph (c)(1)(iv) into
paragraph (c)(1)(iii) and insert new language specific to pension
benefit statements in paragraph (c)(1)(iv). Accordingly, the Department
proposes amending the claims procedure regulation by removing the cross
references to paragraph (c)(1)(iv) of the 2002 safe harbor.
V. Dates, Request for Comments, and Good Faith Compliance
The Departments invites comments no later than 60 days after
February 25, 2026. Commenters are encouraged to express their views on
all aspects of the proposed rule.
Section 338(b) of SECURE 2.0 directed the Secretary of Labor to
update its regulations by December 31, 2024. Section 338(c) of SECURE
2.0, in turn, provides that the new paper benefit statement requirement
shall apply with respect to plan years beginning after December 31,
2025. For the period from publication of this proposal until after the
Department issues a final regulation or other applicable administrative
guidance, the Department, as an enforcement policy, will not take
enforcement action against plan administrators that comply in good
faith with a reasonable interpretation of the provisions set forth in
the proposal.
[[Page 9218]]
VI. Regulatory Impact Analysis
Section 338 of SECURE 2.0 amends section 105(a)(2) of ERISA to
require that defined contribution plans furnish at least one pension
benefit statement per year on paper, while defined benefit plans must
furnish at least one pension benefit statement on paper every three
years. SECURE 2.0 included an exclusion for participants and
beneficiaries covered under the 2002 safe harbor, as well as an
exclusion for participants and beneficiaries who affirmatively opt out
of receiving these statements on paper.
In addition, SECURE 2.0 directed the Department to amend the 2002
and 2020 safe harbors. As amended, the 2002 safe harbor would require
participants who first become eligible to participate and beneficiaries
who first become eligible for benefits after December 31, 2025 to be
provided a one-time paper notification of their right to request that
all documents required under Title I of ERISA be furnished on paper.
The 2020 safe harbor must be modified such that:
1. Participants and beneficiaries be provided with the opportunity
to request electronic disclosure for any pension benefit statement
which would otherwise be required to be delivered on paper;
2. Pension benefit statements which are required to be delivered on
paper include an explanation of how to request the documents in
electronic form, and include contact information, including a telephone
number, for the plan sponsor, plan administrator, or other designated
representative of the plan, and
3. Plans may not charge fees for paper delivery of pension benefit
statements.
SECURE 2.0 directs that plans be allowed to furnish electronic
duplicates of paper statements. SECURE 2.0 also requires that all
ERISA-required disclosures furnished electronically include an
explanation of how to request the disclosures in paper form. No
modifications of the 2020 safe harbor are required to implement these
requirements, as the 2020 safe harbor already requires a statement of
the right to request and obtain a paper copy of a covered document and
does not preclude the provision of duplicate statements.
The Department has examined the effect of the proposal as required
by Executive Order 13563,\11\ Executive Order 12866,\12\ the Regulatory
Flexibility Act,\13\ section 202 of the Unfunded Mandates Reform
Act,\14\ Executive Order 13132,\15\ and Executive Order 14192.\16\
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\11\ 76 FR 3821 (Jan. 21, 2011).
\12\ 58 FR 51735 (Oct. 4, 1993).
\13\ Public Law 96-354, 94 Stat. 1164 (Sept. 19, 1980).
\14\ Public Law 104-4, 109 Stat. 48 (Mar. 22, 1995).
\15\ 64 FR 43255 (Aug. 9, 1999).
\16\ 90 FR 9065 (Feb. 6, 2025).
---------------------------------------------------------------------------
A. Relevant Executive Orders for Regulatory Impact Analyses
Executive Orders 12866 \17\ and 13563 \18\ 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 both
costs and benefits, reducing costs, harmonizing rules, and promoting
flexibility.
---------------------------------------------------------------------------
\17\ 58 FR 51735 (Oct. 4, 1993).
\18\ 76 FR 3821 (Jan. 21, 2011).
---------------------------------------------------------------------------
Under Executive Order 12866, ``significant regulatory actions,'' as
defined by that Executive Order, 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 affect in a material way the economy, 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 entitlements, 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.
Since this proposal seeks to narrowly implement the provisions of
SECURE 2.0 the Department does not anticipate that the proposal alone
would have economic impacts of $100 million or more in any one year.
However, the effects of SECURE 2.0, in combination with this proposal,
are likely to have economic impacts above $100 million or more in any
one year. Therefore, OMB has determined that this proposal meets the
definition of an ``economically significant rule'' within the meaning
of section 3(f)(1) of the Executive Order 12866. The Department has
provided an assessment of the potential benefits, costs, and transfers
associated with this proposal and SECURE 2.0 requirements under a pre-
statutory baseline for its E.O. 12866 analysis.
Executive Order 14192, titled ``Unleashing Prosperity Through
Deregulation,'' was issued on January 31, 2025. Section 3(a) of
Executive Order 14192 requires an agency, unless prohibited by law, to
identify at least ten existing regulations to be repealed when the
agency issues a new regulation. In furtherance of this requirement,
section 3(c) of Executive Order 14192 requires that the new incremental
costs associated with new regulations shall, to the extent permitted by
law, be offset by the elimination of existing costs associated with
prior regulations. A significant regulatory action (as defined in
section 3(f) of Executive Order 12866) that would impose total costs
greater than zero is considered an Executive Order 14192 regulatory
action. This proposed rule, if finalized as proposed, is, therefore,
expected to be an Executive Order 14192 regulatory action.
B. Need for Regulatory Action
As discussed in sections II and III above, section 338 of SECURE
2.0 amended section 105(a)(2) of ERISA to require retirement plans to
provide paper benefit statements in certain cases. Section 338 also
instructed the Department to update its electronic disclosure safe
harbors in concert with the changes to section 105 of ERISA. This
proposal, if adopted as a final rule, would implement these
Congressional mandates.
The proposal may help some Americans consume the important
financial information on their benefit statements. According to a 2022
Survey by the American Association for Retired Persons (AARP), 55
percent of respondents who receive paper statements always review their
statements, compared to 36 percent of respondents who receive only
electronic statements.\19\ However, existing plan default settings can
discourage participants from receiving paper delivery. The same AARP
survey reported that 58 percent of respondents receiving paper
statements did so under the default disclosure options of their plan,
versus 31 percent who actively chose paper delivery.\20\ Requiring
plans
[[Page 9219]]
to change default disclosure settings to include at least one statement
on paper, therefore, may increase the likelihood that some participants
will review their statements and be better informed regarding their
retirement savings.
---------------------------------------------------------------------------
\19\ Brown, S. Kathi. Retirement Account Statements: Paper or
Electronic?, AARP Research, May 2022, https://doi.org/10.26419/res.00529.00. Accessed March 27, 2025.
\20\ The remaining 11 percent reported, ``Don't know.''
---------------------------------------------------------------------------
Older Americans and communities who are underserved by digital
communication \21\ may benefit more than others. The AARP survey
reports that 57 percent of adults would prefer to receive paper
statements at least once per year. These preferences are even higher
amongst low-to-moderate income adults, adults age 50 and older, and
adults without access to a computer at work. However, as noted above,
the majority of participants receiving paper statements do so under the
default settings, rather than actively electing to receive paper
statements. Thus, default disclosure settings with at least one
statement on paper will accommodate these preferences.
---------------------------------------------------------------------------
\21\ According to the National Telecommunications and
Information Administration, 16.7 percent of Americans report not
using the internet in any location. National Telecommunications and
Information Administration. ``internet Use (Any Location).'' https://www.ntia.gov/data/explorer#sel=internetUser&demo=&pc=prop&disp=chart.
---------------------------------------------------------------------------
C. Baseline
This proposal narrowly seeks to conform the Department's existing
rules to SECURE 2.0. As such, the additional regulatory burden imposed
by the Department is estimated to be de minimis or slightly negative.
However, for the purposes of this RIA, the Department will consider the
effects of both SECURE 2.0 and the ensuing proposal. As such, the
baseline that will be used in this analysis will be from before SECURE
2.0 was passed.
D. Summary of Impacts
In accordance with OMB Circular A-4, Table 1 depicts an accounting
statement summarizing the Department's assessment of the benefits,
costs, and transfers associated with this regulatory action. The
Department is unable to quantify all benefits, costs, and transfers of
the proposal but has sought, where possible, to describe these non-
quantified impacts.
Table 1--Accounting Statement \1\
----------------------------------------------------------------------------------------------------------------
----------------------------------------------------------------------------------------------------------------
Benefits:
----------------------------------------------------------------------------------------------------------------
Non-Quantified:
----------------------------------------------------------------------------------------------------------------
Increased regulatory uniformity between the 2002 and 2020 safe harbors regarding the universal
right to opt out of electronic communications..............................................................
----------------------------------------------------------------------------------------------------------------
Increased clarity among participants about the right to receive paper or electronic statements.....
Increased participant knowledge on the state of their retirement benefits due to receiving
statements in the form of the participant's choosing.......................................................
----------------------------------------------------------------------------------------------------------------
Costs:
----------------------------------------------------------------------------------------------------------------
Quantified:
----------------------------------------------------------------------------------------------------------------
Review and prepare for the implementation of SECURE 2.0 and rule...................................
Prepare initial notice under the 2002 safe harbor for new participants.............................
Prepare explanation of how to receive required paper benefit statements electronically under the
2020 safe harbor...........................................................................................
Update notice/explanation to add contact information and plan specific information.................
----------------------------------------------------------------------------------------------------------------
Estimate Year Discount rate Period
(primary) dollar (percent) covered
----------------------------------------------------------------------------------------------------------------
Annualized Monetized ($ Millions/Year).................. $49.40 2024 7 2025-2034
47.38 2024 3 2025-2034
----------------------------------------------------------------------------------------------------------------
Transfers:
----------------------------------------------------------------------------------------------------------------
Quantified:
----------------------------------------------------------------------------------------------------------------
Transfer the costs associated with paper delivery of duplicate pension benefit statements from
participants to plans......................................................................................
----------------------------------------------------------------------------------------------------------------
Estimate Year Discount rate Period
(primary) dollar (percent) covered
----------------------------------------------------------------------------------------------------------------
Annualized Monetized ($ Millions/Year).................. 0.46 2024 7 2025-2034
0.46 2024 3 2025-2034
----------------------------------------------------------------------------------------------------------------
\1\ All Costs, Benefits, and Transfers displayed in this accounting table represent the effects of SECURE 2.0.
The proposal updates Departmental safe harbors to comply with existing law. The Perpetual Time Horizon
annualized costs (in 2024 dollars) for the purposes of E.O. 14192, is $40.87 million.
E. Request for Comment
The Department invites comments addressing its estimates of the
benefits, costs, and transfers associated with the proposed rulemaking,
as well as any quantifiable data that would support or contradict any
aspect of its analysis. Specifically, the Department requests comments
on:
1. How prevalent electronic disclosure was prior to the passage of
SECURE 2.0 (specifically whether the Department's estimate that 96.1
percent of participants received electronic disclosure prior to SECURE
2.0 is reasonable);
2. How prevalent is the use of the 2002 safe harbor vs. the 2020
safe harbor for electronic disclosure;
[[Page 9220]]
3. Would the newly required paper benefit statement encourage plans
to switch from the 2020 safe harbor to the 2002 safe harbor for wired-
at-work participants;
4. How prevalent is the use of service providers for the purposes
of rule review, compliance, and preparation of legal notices and
explanations (specifically whether the Department's assumption that 90%
of plans will use service providers for these services is reasonable);
5. How prevalent is the use of service providers for mailing
pension benefit statements and other required disclosures (specifically
whether the Department's assumption of a $1 per piece cost to mass-mail
disclosures is reasonable);
F. Assumptions and Affected Entities
The Department used several datapoints and assumptions in
conducting this analysis. General datapoints and assumptions are
displayed in Table 2 below:
Table 2--General Assumptions
------------------------------------------------------------------------
Description Assumption Source
------------------------------------------------------------------------
Number of Defined Contribution 754,862 2022 Form 5500
(DC) Plans. Data.\1\
Number of Defined Benefit (DB) 46,508 2022 Form 5500 Data.
Plans.
Number of Participants and \2\ 152,365,031 2022 Form 5500 Data.
Beneficiaries Receiving Regular
Statements.
Number of Service Providers...... 3,552 2022 Form 5500
Schedule C Data.
New Hire Rate.................... 3.6% BLS Job Openings and
Labor Turnover.\2\
Share of Plans Using a Service 90.0% Departmental
Provider for Rule Review and Assumption.
Notice Preparation.
Hourly Cost for a Legal $181.06 Departmental
Professional. Calculation.\3\
Hourly Cost for a Clerical $70.29 Departmental
Professional. Calculation.
Per-unit Average Cost to Prepare $1.00 Departmental
and Send Mailed Statements. Assumption.\4\
Printing Cost Per Page........... $0.05 Departmental
Assumption.
------------------------------------------------------------------------
\1\ This data can be found in the 2022 Private Pension Plan Bulletin.
\2\ Beneficiaries in a DB plan can only receive statements on request.
Meanwhile, beneficiaries in DC plans are able to receive regular
statements, which is the focus of this rule. As a result, DB
Beneficiaries will not be included in calculations discussing
``beneficiaries''. See 29 USC 1025 for more information.
\3\ Bureau of Labor Statistics, Job Opening and Labor Turnover. Table A,
Total Private. February 2025. Most recent release can be found here:
https://www.bls.gov/news.release/pdf/jolts.pdf.
\4\ For information on how the Department estimates labor cost
see:https://www.dol.gov/sites/dolgov/files/EBSA/laws-and-regulations/rules-and-regulations/technical-appendices/labor-cost-inputs-used-in-ebsa-opr-ria-and-pra-burden-calculations-june-2019.pdf.
\5\ For more information, see the discussion in section VI.H(3).
In addition to the data and assumptions displayed in Table 2 above,
the Department also made a number of assumptions regarding the reliance
on electronic disclosure and use of the 2002 and 2020 safe harbors.
These assumptions, displayed in Table 3, are key to the analysis below
and thus warrant separate discussion.
Table 3--E-Disclosure and Safe Harbor Assumptions
------------------------------------------------------------------------
Description Assumption (%) Source
------------------------------------------------------------------------
Share of Workers Aged 25 and Over 37.4 National
Who Have Access to Internet at Telecommunications
Work. and Information
Agency.\1\
E-Disclosure Share, All 96.1 Departmental
Participants: Pre-Statute. Calculation.
E-Disclosure Share, 2002 Safe 96.1 Departmental
Harbor: Post-Statute. Assumption.
E-Disclosure Share, 2020 Safe 63.0 Departmental
Harbor: Post-Statute. Assumption.
Share of Plans Using 2002 Safe 37.4 Departmental
Harbor. Assumption.
Share of Participants Covered 37.4 Departmental
Under the 2002 Safe Harbor. Assumption.
Share of Plans Using 2020 Safe 96.1 Departmental
Harbor. Assumption.
Share of Participants Covered 62.6 Departmental
Under the 2020 Safe Harbor. Assumption.
E-Disclosure Opt-In Rate, 2020 51.3 Departmental
Safe Harbor. Calculation.\2\
------------------------------------------------------------------------
\1\ National Telecommunications and Information Administration. NTIA
Data Explorer, 2023, https://www.ntia.gov/data/explorer#sel=workInternetUser&demo=age&pc=prop&disp=chart.
\2\ According to the NTIA survey, 81.5% of households use the internet
in 2023. This figure is multiplied by the post-statute e-disclosure
rate for the 2020 safe harbor, which is 63 percent. In total, the
Department estimates that 51.3% = (63% x 81.5%) would receive
electronic disclosures.''
The Department considered how SECURE 2.0 and the proposal would
affect electronic disclosure and safe harbor use. The safe harbor
categorizations refer to which safe harbor the plan will furnish
electronic disclosure under, while the electronic disclosure rate
describes the share of participants actually receiving electronic
disclosure. For example, consider a plan with 1,000 participants using
the 2020 safe harbor for electronic disclosure, where 961 receive
electronic disclosure and 39 participants request paper disclosure.
Under this hypothetical, all participants in this plan are covered
under the 2020 safe harbor, but the electronic disclosure rate is 96.1
percent. When considering the pre-statutory baseline for electronic
disclosure, the Department assumes that plans covered substantially all
participants under the 2020 safe harbor, and that 96.1 \22\ percent of
participants
[[Page 9221]]
received electronic disclosure prior to SECURE 2.0. The Department
assumes that the share of plans that provided electronic disclosure
prior to SECURE 2.0 mirrored this estimate.
---------------------------------------------------------------------------
\22\ The Department estimates approximately 96.1% of
participants receive disclosures electronically under the combined
effects of the 2002 electronic disclosures safe harbor and the 2020
electronic safe harbor. The Department estimates that 58.3% of
participants will receive electronic disclosures under the 2002 safe
harbor. According to the National Telecommunications and Information
Agency (NTIA), 37.4% of individuals age 25 and over have access to
the internet at work. According to a Greenwald & Associates survey,
84.0% of plan participants find it acceptable to make electronic
delivery the default option, which is used as the proxy for the
number of participants who will not opt-out of electronic disclosure
that are automatically enrolled (for a total of 31.4% receiving
electronic disclosure at work). Additionally, the NTIA reports that
44.1% of individuals age 25 and over have access to the internet
outside of work. According to a Pew Research Center survey, 61.0% of
internet users use online banking, which is used as the proxy for
the number of internet users who will affirmatively consent to
receiving electronic disclosures (for a total of 26.9% receiving
electronic disclosure outside of work). Combining the 31.4% who
receive electronic disclosure at work with the 26.9% who receive
electronic disclosure outside of work produces a total of 58.3%. The
remaining 41.7% of participants are subject to the 2020 safe harbor.
According to the 2022 American Community Survey, 91.2% of the
population has an internet subscription. The Department estimates
that 0.5% of electronic disclosures will bounce back and will need
to be sent a paper disclosure. Accordingly, for the 41.7% of
participants not affected by the 2002 safe harbor, 90.7%, or an
additional 37.8% (41.7% x 90.7%), are estimated to receive
electronic disclosures under the 2020 safe harbor. In total, the
Department estimates that 96.1% (58.3% + 37.8%) would receive
electronic disclosures.
---------------------------------------------------------------------------
When considering wired-at-work participants under SECURE 2.0, there
are two paths to avoid the extra costs from paper delivery of the
benefit statement. Either participants opt out of this additional paper
delivery under the 2020 safe harbor, or plans choose to furnish pension
benefit statements to these participants electronically under the 2002
safe harbor. In the face of this requirement, the Department believes
that plans will use the 2002 safe harbor to furnish pension benefit
statements to all ``wired-at-work'' participants. According to the
National Telecommunications and Information Agency, 37.4 percent of
workers age 25 and over have access to the internet at work. Thus, the
Department assumes that approximately 37.4 percent of participants \23\
are ``wired-at-work'' and will be covered under the 2002 safe harbor.
---------------------------------------------------------------------------
\23\ Generally only participants, not beneficiaries, are
eligible to receive electronic disclosures under the wired-at-work
provision of the 2002 safe harbor. SECURE 2.0 requires an initial
notice for newly eligible participants and beneficiaries who first
become eligible for benefits after December 31, 2025. However, for
the purposes of this burden analysis, only wired-at-work
participants are assumed to receive the initial paper notice, as
beneficiaries who have affirmatively consented to electronic
disclosure under the 2002 safe harbor will likely receive the
existing advance statement on paper instead. See section II.B above.
---------------------------------------------------------------------------
The Department further assumes that the share of plans using the
2002 safe harbor for some or all of their participants will mirror this
at 37.4 percent.\24\ Since plans would be using the 2002 safe harbor
for the purposes of maintaining electronic disclosure, the Department
believes that this population would maintain an electronic disclosure
rate equal to the pre-statutory period. If this were not the case, then
moving participants to the 2002 safe harbor would yield no benefits. As
such, 96.1 percent of the wired-at-work population is expected to
receive electronic disclosure under the 2002 safe harbor. However, the
primary effect of SECURE 2.0 on the 2002 safe harbor is to provide
participants with an initial notice explaining the right to receive
paper documents. The Department believes that this document will be
added to standard new-hire documents for all newly-eligible wired-at-
work participants. Thus, this regulatory impact analysis will assume
the affected population is all newly-hired wired-at-work participants,
regardless of whether or not they continue to receive electronic
disclosure under the 2002 safe harbor in the future.
---------------------------------------------------------------------------
\24\ Access to internet at work as a core function of job duties
may vary by industry and plans, but because it can also vary by type
of worker within a plan, the Department uses the same 37.4 percent
as a simplifying assumption. A sensitivity analysis examining the
effects of changing this assumption can be found in Table 11.
---------------------------------------------------------------------------
Regarding the 2020 safe harbor, the Department assumes that all
plans that provided electronic disclosure prior to SECURE 2.0 will
continue to use the 2020 safe harbor for some or all their
participants. It should be noted that some plans using the 2020 safe
harbor may also use the 2002 safe harbor for some of their
participants. As a result of this overlap, the number of plans
providing electronic disclosure will not equal the sum of plans using
the 2002 and 2020 safe harbors individually.
The Department assumes that all non wired-at-work participants,
will be covered under the 2020 safe harbor. Thus, the Department
estimates that 62.6 percent \25\ of participants will be covered under
the 2020 safe harbor. Prior to SECURE 2.0 the Department assumed that
these participants would receive electronic disclosure at the same rate
as wired-at-work participants, which was assumed to be 96.1 percent.
---------------------------------------------------------------------------
\25\ This is calculated as 62.6% = 100%-37.4%
---------------------------------------------------------------------------
However, after SECURE 2.0's implementation, the Department believes
that the use of electronic disclosure among participants covered under
the 2020 safe harbor will decrease. As a result of inertia, many
participants are expected to leave their statement settings at the
default and receive the required paper benefit statement. However, some
participants are expected to opt back into exclusive electronic
disclosure. In comments received on the Department's RFI \26\ on SECURE
2.0, Vanguard indicated that 80 percent of its participants had signed
up for online account access and that 63 percent of its participants
received disclosures electronically. Since Vanguard's electronic
delivery also requires an affirmative opt-in, the Department thinks
that this 63 percent is a reasonable estimate for the long-run share of
people who will affirmatively opt back into electronic disclosure after
SECURE 2.0's implementation. While this number is derived from a single
comment, it mirrors the Department's previous estimate for the share of
participants that would sign up for electronic disclosure, which was 61
percent. This was derived from a survey \27\ which reported the share
of internet users that banked online, which the Department used as a
proxy for the use of electronic disclosure. As such, the Department
assumes that electronic disclosure rates amongst participants covered
by the 2020 safe harbor will sharply fall after SECURE 2.0 is
implemented, and then slowly rise to a long-run rate of 63 percent. The
Department estimates that the rate of growth for this figure will be
51.3 percent, which is calculated in Table 3.
---------------------------------------------------------------------------
\26\ ``Request for Information-SECURE 2.0 Reporting and
Disclosure.'' Federal Register, vol. 88, no. 154, 11 Aug. 2023, pp.
54511-54534. https://www.federalregister.gov/documents/2023/08/11/2023-17249/request-for-information-secure-20-reporting-and-disclosure.
\27\ ``51% of U.S. Adults Bank Online.'' Pew Research Center, 7
Aug. 2013, https://www.pewresearch.org/2013/08/07/51-of-u-s-adults-bank-online/.
---------------------------------------------------------------------------
Taken together, the Department assumes that 51.3 percent of
participants covered under the 2020 safe harbor will opt in to
electronic disclosure in the first year. This is referred to as the
short-run rate of electronic disclosure. Each year after that, the
Department assumes more participants will sign up for electronic
disclosure, and the gap between the short-run and long-run electronic
disclosure rates will decrease by another 51.3 percent. The Department
believes that this model of slowly increasing electronic disclosure,
also known as a diminishing gains assumption, will better model
participant behavior than simply assuming an immediate 63 percent
electronic disclosure rate.
SECURE 2.0 includes provisions which affect paper delivery, such as
the prohibition of fees for duplicate paper statements. As a result,
all participants covered under the 2020 safe harbor, regardless of
whether they receive
[[Page 9222]]
pension benefit statements electronically or on paper, will be affected
by SECURE 2.0 and the proposal.
The Department requests comment on these assumptions. The
Department also acknowledges that this analysis is particularly
sensitive to these assumptions. To address this sensitivity, the
Department conducted an extensive uncertainty analysis which
demonstrates how differing assumptions of these variables would affect
the final regulatory impact. For instance, plans may decide that moving
participants over to the 2002 safe harbor just to avoid a paper
disclosure is not what they want to do. In this case, leaving
participants on the 2020 safe harbor would result in a higher estimated
cost for SECURE 2.0 and the proposal. Alternatively, if a larger
proportion of participants are being covered by the 2002 safe harbor,
the estimated costs for SECURE 2.0 and the proposal would be lower. See
section V1.J. of the regulatory impact analysis for the associated
uncertainty analysis.
The Department also assumes that many plans will rely on service
providers to assist in legal compliance with SECURE 2.0 and the
proposal. The Department does not have recent data on the use of
service providers by plans but believes that a large majority of plans
use service providers for various elements of plan administration. In
1998, the Department cited \28\ a report by Spencer & Associates which
stated that ``less than 5% of 401(k) plans were being administered in-
house exclusively and only 30% by in-house staff supported by
vendors.'' \29\ The report also stated that ``59% of 401(k) plans use
bundled services from full service providers'' and that ``among plans
with fewer than 250 participants, 85% rely on bundled services.'' \30\
The Department believes that the spread of the internet since the
publication of this report is likely to have increased the ease of use
and prevalence of service providers amongst plans.
---------------------------------------------------------------------------
\28\ United States, Pension and Welfare Benefits Administration.
Study of 401(k) Plan Fees and Expenses. https://www.dol.gov/sites/dolgov/files/ebsa/pdf_files/study-of-401k-plan-fees-and-expenses.pdf. Accessed 22 Apr. 2025.
\29\ Spencer, C. & Associates, ``Employers Happy With 401(k)
Administration, Shift More Costs to Employees,'' Spencer's Research
Reports on Employee Benefits, November 15, 1996.
\30\ Fink, M., Investment Executives Institute, ``Statement
before the U.S. Department of Labor, Pension and Welfare Benefits
Administration Public Hearing on 401(k) Plan Fees,'' November 12,
1997.
---------------------------------------------------------------------------
To validate this with more recent data, the Department analyzed
Schedule C records from the Form 5500, which detail payments to service
providers for a subset of plans that file Schedule C, specifically
those with 100 or more employees on the first day of the plan year and
only then if the compensation (whether direct or indirect) received by
any service provider in connection with services rendered to the plan
is at least $5,000. The Department found that 80 percent of plans
filing a Schedule C reported using service providers for ``Plan
Administration, Recordkeeping, or Recordkeeping Fees.'' While that
share excludes smaller plans that don't file the Schedule C, Department
assumes that smaller plans have fewer resources to conduct in-house
plan management and are thus more likely to use service providers. With
these considerations in mind, the Department assumes that 90 percent of
all plans will rely on service providers to review the proposal, inform
them of the needed changes, and prepare the needed forms, rather than
carrying out these tasks in-house.
Using the 2022 Form 5500 Schedule C data, the Department identified
3,552 unique EINs for service providers in the ``Plan Administration,
Recordkeeping, or Recordkeeping Fees'' service codes. The Department
assumes that this type of service provider will be involved in
reviewing the proposal and preparing the new initial notice for the
2002 safe harbor and electronic delivery explanation for the 2020 safe
harbor. The Department requests comment on these assumptions.
Table 4--Affected Entities
------------------------------------------------------------------------
Entities Description Value
------------------------------------------------------------------------
Plans Using 2002 Safe Harbor... 37.4% of Plans......... 299,712
Plans Using 2020 Safe Harbor... 96.1% of Plans......... 770,117
---------------
Subtotal: Affected Plans... 100% of Plans.......... 801,370
Newly Eligible Participants 37.4% of Participants x 2,833,356
Covered by 2002 Safe Harbor. 5% Newly Eligible for
Benefits.
All Participants and 62.6% of Participants + 95,697,905
Beneficiaries Covered Under Beneficiaries Eligible
2020 Safe Harbor. for Benefits.
---------------
Subtotal: Affected 66% of Participants + 98,531,261
Participants. Beneficiaries Eligible
for Benefits.
Service Providers Conducting Service Providers for 3,552
Rule Review and Compliance Plan Administration
Support. and Recordkeeping
Service Codes.
---------------
Total Affected Entities.... ....................... 99,336,183
------------------------------------------------------------------------
* This subtotal differs from the sum of each group as some plans use
both safe harbors.
Out of participants covered under the 2002 safe harbor, primarily
newly-hired workers would be affected. Additionally, workers who become
newly eligible through promotion or conversion from part- to full-time
would also be affected. The Department does not have data on existing
workers who become newly eligible to participate through full-time
conversion or promotion. To account for these workers, the Department
adjusts the new-hire rate of 3.6 percent up to 5 percent of
participants when considering newly-eligible participants. Accordingly,
the Department assumes that 5 percent of participants covered by the
2002 safe harbor will be affected by this proposal.
Plans relying on the 2002 safe harbor for some or all of their
electronic disclosures will be required to provide participants who
become eligible to participate after December 31, 2025 with a one-time
notice that they will receive electronic notifications. Thus, all plans
using the 2002 safe harbor for some or all participants will be
affected by this proposal.
Plans relying on the 2020 safe harbor for electronic disclosure
will now be required to provide certain pension benefit statements on
paper unless participants affirmatively opt in to receiving these
statements electronically. Defined contribution
[[Page 9223]]
plans will be required to provide at least one statement per year on
paper, while most defined benefit plans will be required to provide at
least one statement every three years on paper.\31\ To establish the
right to opt in to receiving these statements electronically, affected
plans must include explanations of these rights and how to opt out of
receiving this statement on paper. Additionally, affected plans will
now be prohibited from charging for additional paper copies of pension
benefit statements. All plans using and participants covered under the
2020 safe harbor are expected to be affected by this proposal.
---------------------------------------------------------------------------
\31\ The Department assumes that most frozen defined benefit
plans will opt to provide an annual notice of statement
availability, rather than the standard triennial statement.
---------------------------------------------------------------------------
Finally, service providers involved in reviewing the proposal and
preparing the new initial notice for the 2002 safe harbor and
electronic delivery explanation for the 2020 safe harbor will be
affected by this proposal. The Department's estimates for the number of
affected entities are displayed in Table 4 above.
G. Benefits
This proposal is mandated by Congress to align the Department's
safe harbors with SECURE 2.0's amendments to section 105(a) of ERISA.
As such, one benefit of this proposal will be decreasing regulatory
confusion amongst plans and participants as a result of the
inconsistent electronic disclosure requirements between SECURE 2.0 and
Departmental safe harbors.
Second, the changes made by SECURE 2.0 will also create additional
regulatory uniformity between the 2002 and 2020 safe harbors by
requiring participants covered under the 2002 safe harbor to be
provided a global right to opt out of electronic disclosure, and
properly informed of it. Both participants under the 2020 and 2002 safe
harbors will now receive similar initial notices, notifying
participants of their right to receive paper disclosure at the start of
their eligibility. Furthermore, the paper statement required to be
provided at least once a year in the updated 2020 safe harbor will mean
that non-wired-at-work participants will only be able to receive
exclusively electronic disclosure if they affirmatively request it.
This will make the requirements under the 2002 safe harbor more similar
to the requirements under the 2020 safe harbor and ensure that all
participants are properly informed of their right to opt out of
electronic disclosure.
Additionally, as discussed in section VI.B above, SECURE 2.0 and
the accompanying proposal will better align the Department's safe
harbors with participant's preferences. This will better support
elderly, low-to-moderate income, and non-wired-at-work participants,
who report a greater desire for paper delivery of statements.\32\ These
populations tend to have less access to the internet and are therefore
less well-served by default electronic disclosure regimes.\33\ Fifty-
eight percent of participants receiving paper statements do so because
it is the default option for their plan.\34\ Thus, by encouraging plans
to change the plan default to include at least one paper benefit
statement per year, SECURE 2.0 and the proposal will promote better
access to retirement information across groups. Moreover, since
participants that receive paper statements report that they are more
likely to fully review the statement,\35\ SECURE 2.0 and the proposal
are likely to increase participant knowledge of the state of their
retirement benefits.
---------------------------------------------------------------------------
\32\ Brown, S. Kathi. Retirement Account Statements: Paper or
Electronic?, AARP Research, May 2022, https://doi.org/10.26419/res.00529.00. Accessed March 27, 2025.
\33\ National Telecommunications and Information Administration.
NTIA Data Explorer. https://www.ntia.gov/data/
explorer#sel=workinternetUser&demo=age&pc=prop&disp=chart.
\34\ Brown, S. Kathi. Retirement Account Statements: Paper or
Electronic?, AARP Research, May 2022, https://doi.org/10.26419/res.00529.00. Accessed March 27, 2025.
\35\ Ibid.
---------------------------------------------------------------------------
Taken together, SECURE 2.0 and the proposal will allow plans to
have more clarity for providing electronic disclosure by addressing the
differences between statute and current safe harbors. The additional
notices will also reduce the differences between the 2002 and 2020 safe
harbors, which will allow plans to use similar administrative
procedures regardless of which safe harbor they use. By encouraging
more paper delivery, SECURE 2.0 and proposal will also support
populations which are underserved by the current electronic disclosure
standards and increase participant knowledge of their pensions.
H. Costs
Section 338 of SECURE 2.0 requires plans using the 2020 safe harbor
to provide certain pension benefit statements on paper, with a new
explanation, and requires plans using the 2002 safe harbor to provide a
new initial notice that participants and beneficiaries will receive
electronic delivery and how to receive statements on paper to newly-
eligible participants and beneficiaries. SECURE 2.0 also provides that
plans may not charge any fee for delivery of any paper statement.
Previously, the 2020 safe harbor only prohibited plans from charging
fees for the first copy of a paper benefit statement, so this
prohibition was expanded to include additional copies beyond the first.
Finally, SECURE 2.0 also directs the Department to allow plans to
furnish duplicate electronic statements and requires that all ERISA-
required disclosures provided electronically include an explanation of
how to request the disclosures in paper form. The Department believes
that these provisions are met by the existing safe harbor and will
require no change. The proposal will not add any additional costs
beyond those imposed by SECURE 2.0. The Department used a number of
sources and assumptions in its estimation of the costs associated with
the statutory provisions in SECURE 2.0. These assumptions, including
mailing and labor cost assumptions, were discussed and displayed in
tables 2 and 3 above.
(1) Reviewing of Rule and Planning for Implementation
As a result of the updated provisions of SECURE 2.0, plans will
need to review SECURE 2.0, the proposal and relevant guidance to devise
an implementation plan to bring their disclosure procedures into
compliance. As discussed in section VI.F above, the Department assumes
that 90 percent of plans will rely on service providers to review
SECURE 2.0 and the proposal and provide guidance to plans on
implementation.
The Department assumes that the proposal will take approximately
four hours to review, regardless of whether the plans are reviewing the
proposal in-house or utilizing service providers. Per discussions with
OMB on previous regulations, the Department applies an average reading
speed of 250 words per minute to the preamble and regulatory text. This
yields a reading time of approximately 45 minutes. The Department
assumes a further 3 hours and 15 minutes to account for additional work
to plan for implementation of SECURE 2.0 and the proposal. The
Department requests comment on these assumptions. The costs associated
with this requirement are displayed in Table 5 below:
[[Page 9224]]
Table 5--Costs for Rule Review and Implementation Planning
----------------------------------------------------------------------------------------------------------------
Hours per Equivalent
Description Affected entities entity Hourly wage Total hours cost
(A).................. (B) (C) (A x B) (A x B x C)
----------------------------------------------------------------------------------------------------------------
Rule Review (Service Providers)... 3,552 Service 4 $181.06 14,208 $2,572,500
Providers.
Rule Review (In-House)............ 80,137 = 801,370 4 181.06 320,548 58,038,421
Plans x 10% Not
Using a Service
Provider.
------------------------------------------------------
Total......................... ..................... ........... ........... 334,756 60,610,921
----------------------------------------------------------------------------------------------------------------
(2) 2002 Safe Harbor: Notice for New Participants and Beneficiaries
SECURE 2.0 requires that participants and beneficiaries covered
under the 2002 safe harbor, who are newly eligible to participate, or
for benefits after December 31, 2025, must be provided with a one-time
paper notice. This notice must explain that by default they will
receive electronic documents in the future. This will require legal
professionals to prepare the notice, and clerical professionals to add
contact and plan information to the notice. The Department assumes that
this notice would be included along with other new-hire and benefit
explanation documents. As such, the Department assumes there would be
no additional distribution costs for this notice.
The Department assumes that the share of plans using service
providers for preparation of this notice will mirror the share of plans
using service providers for rule review. For plans utilizing service
providers, the Department assumes that it will take an additional five
minutes for a clerical worker to add contact and plan information to
the prepared notice. The Department requests comment on these
assumptions.
The costs associated with this requirement are discussed in Table 6
below:
Table 6--Costs for Preparation of 2002 Safe Harbor Notice
----------------------------------------------------------------------------------------------------------------
Hours per Equivalent
Description Affected entities entity Hourly wage Total hours cost
(A).................. (B) (C) (A x B) (A x B x C)
----------------------------------------------------------------------------------------------------------------
Notice Preparation (Service 3,552 Service 1 $181.06 3,552 643,125
Providers). Providers.
Notice Preparation (In-House)..... 29,971 = 299,712 1 181.06 29,971 5,426,592
Plans x 10% Not
Using a Service
Provider.
Adding Contact and Plan 269,741 = 299,712 5/60 70.29 22,478 1,580,009
Information to Drafted Notices. Plans x 90% Using a
Service Provider.
------------------------------------------------------
Total......................... ..................... ........... ........... 56,002 $7,649,726
----------------------------------------------------------------------------------------------------------------
(3) 2020 Safe Harbor: Electronic Disclosure Explanation and Additional
Paper Benefit Statements
SECURE 2.0 requires that, unless otherwise exempted, defined
contribution plans provide at least one pension benefit statement per
year on paper, and that defined benefit plans provide at least one
pension benefit statement every three years on paper. The Department
assumes that most plans prefer electronic disclosure and are currently
sending as many of these statements electronically as possible. With
this new requirement, participants who previously opted in to
electronic disclosure would begin receiving paper statements unless
they pre-emptively opt out of electronic disclosure before the first
statement is sent.
As shown in Table 3, the Department believes that 51.3 percent of
participants covered under the 2020 safe harbor will pre-emptively opt
out of these newly required paper statements. Of those who do not pre-
emptively opt out, the Department estimates that the remainder of
defined contribution plan participants and one-third of participants in
non-frozen defined benefit plans will begin receiving paper statements
in the first year.\36\ Participants in frozen defined benefit plans are
expected to receive a shorter notice of statement availability
annually, rather than the full triennial defined benefit statement.
After receiving their first statement on paper, the Department believes
that many participants will opt out of receiving paper statements in
the future. The Department believes that a further 51.3 percent of
participants receiving a paper statement will opt out of paper
statements before their next statement in each subsequent year. Through
these diminishing gains, the rate of electronic disclosure will
eventually approach 63 percent. The Department requests comment on
these assumptions.
---------------------------------------------------------------------------
\36\ Since defined benefit plans are only required to provide
one statement every third year, the Department assumes that these
statements are uniformly distributed across participants, and that
one third of all defined benefit participants will receive a paper
statement per year.
---------------------------------------------------------------------------
All statements required to be provided on paper must also include
an explanation of how to request the documents in electronic form. This
additional disclosure would be prepared by a legal professional. The
Department assumes a similar share of plans will utilize service
providers to prepare this explanation as they did for the initial
notice in the 2002 safe harbor. The Department assumes this disclosure
will be included with the paper statements, rather than mailed
separately. A clerical professional would add contact and plan
information to the prepared explanation.
The costs associated with this requirement in year one are
displayed in Tables 7 and 8 below:
[[Page 9225]]
Table 7--Cost for Preparation of Explanation of Electronic Delivery for 2020 Safe Harbor
[Year 1]
----------------------------------------------------------------------------------------------------------------
Hours per Equivalent
Description Affected entities entity Hourly wage Total hours cost
(A).................. (B) (C) (A x B) (A x B x C)
----------------------------------------------------------------------------------------------------------------
Explanation Preparation (Service 3,552 Service 1 $181.06 3,552 $643,125
Providers). Providers.
Explanation Preparation (In-House) 77,012 = 770,117 1 181.06 77,012 13,943,731
Plans x 10% Not
Using a Service
Provider.
Adding Contact and Plan 693,105 = 770,117 5/60 70.29 57,759 4,059,862
Information to Drafted Plans x 90% Using a
Explanations. Service Provider.
------------------------------------------------------
Total......................... ..................... ........... ........... 138,322 $18,646,718
----------------------------------------------------------------------------------------------------------------
Table 8--Cost for Distribution of New Paper Benefit Statements for 2020 Safe Harbor
[Year 1]
----------------------------------------------------------------------------------------------------------------
Material Distribution
Description Affected entities Pages per costs per costs per Total cost burden
disclosure page disclosure
(A)............... (B) (C) (A x B) (A x [(B x C) +
D])
----------------------------------------------------------------------------------------------------------------
Distribution of Statements for 4,268,874 = ((\1/ 1 $0.05 $1.00 $4,065,617
DB Plans. 3\) x 16,916,210
Participants in
Non-Frozen DB
Plans Under 2020
Safe Harbor +
3,899,580
Participants
Frozen DB Plans
Under 2020 Safe
Harbor) x (96.1%
Pre-Statute E-
Disclosure Rate-
51.3% Post-
Statute E-
Disclosure Rate).
Distribution of Statements for 34,367,195 = 5 0.05 1.00 42,958,993
DC Plans. 76,789,620 DC
Participants and
Beneficiaries
Covered by 2020
Safe Harbor x
(96.1% Pre-
Statute E-
Disclosure
Ratex51.3% Post-
Statute E-
Disclosure Rate).
-----------------------------------------------------------
Total....................... .................. ........... ........... ............ 47,024,610
----------------------------------------------------------------------------------------------------------------
The Department expects that many plans use service providers to
process regular mass disclosures. Sometimes these services will be
provided by service providers as a package deal for plan
administration, while other times it will be done by a dedicated mass
mailing service. Plans conducting regular mailing in-house are also
likely to use mass mailing machines to prepare documents for mailing,
rather than using a clerical professional to prepare each piece
manually.
To estimate this cost, the Department examined Schedule C Data for
plans that reported using a separate mass mailing service. The
Department then calculated the cost per participant of these service
providers. Assuming that each participant receives only one paper
document per year, this figure is then used to estimate the cost of
mass mailing. By only examining separate mailing service providers,
rather than including other, one-stop service providers that provide
participant communication or copying services, the Department believes
it can be more certain that its estimates only include mailing and
printing services. This analysis provided a median cost per disclosure
of 65 cents, and an average cost of $1.05.
The Department also examined publicly available estimates from
mailing services. USPS direct mailing services for plan-designed
letters sent by first class mail yielded an approximate estimate of 95
cents per piece. Examining private companies offering these services,
the Department found per-piece rates ranging from 77 cents up to $2.65.
Taking all of these data points into consideration, the Department
decided to set a per-piece mailing cost of $1.00 per piece, with an
added charge of 5 cents per additional page, which falls squarely in
the range of observed datapoints. The Department requests comment on
these assumptions.
As discussed earlier, the Department assumes that 51.3 percent of
participants covered under the 2020 safe harbor will pre-emptively sign
up for electronic disclosure of the required paper benefit statements.
After that, the Department assumes that 51.3 percent of participants
who receive a paper benefit statement in a given year will sign up for
electronic disclosure before their next statement. Over time, the
electronic disclosure rate will slowly converge to a 63 percent
electronic disclosure rate. The Department's estimates for these costs
over time are displayed in Table 9 below.
[[Page 9226]]
Table 9--Ten-Year Total Costs Associated With Statute and Proposal
--------------------------------------------------------------------------------------------------------------------------------------------------------
Electronic disclosure rates Statute and proposal costs
-----------------------------------------------------------------------------------------------------
Change to 2020
2020 Safe 2020 Safe safe harbor Adding contact Distribution
Years harbor harbor paper Notice and and plan cost for Total costs
electronic paper disclosure Rule review explanation information to additional \1\
disclosure disclosure rate from preparation drafted paper benefit
rate (%) rate (%) statute and notices statements
proposal (%)
--------------------------------------------------------------------------------------------------------------------------------------------------------
Pre-Statute........................... 96.1 3.9 0.0 $0 $0 $0 $0 $0
1..................................... 51.3 48.7 44.8 60,610,921 20,656,573 5,639,871 47,024,610 133,931,975
2..................................... 57.3 42.7 38.8 0 0 0 40,736,877 40,736,877
3..................................... 60.2 39.8 35.9 0 0 0 37,677,581 37,677,581
4..................................... 61.7 38.3 34.4 0 0 0 36,189,080 36,189,080
5..................................... 62.3 37.7 33.8 0 0 0 35,464,850 35,464,850
6..................................... 62.7 37.3 33.4 0 0 0 35,112,476 35,112,476
7..................................... 62.8 37.2 33.3 0 0 0 34,941,028 34,941,028
8..................................... 62.9 37.1 33.2 0 0 0 34,857,610 34,857,610
9..................................... 63.0 37.0 33.1 0 0 0 34,817,023 34,817,023
10.................................... 63.0 37.0 33.1 0 0 0 34,797,276 34,797,276
--------------------------------------------------------------------------------------------------------------------------------------------------------
\1\ Cost estimates are not inflation adjusted and are presented in constant dollars.
I. Transfers
SECURE 2.0 prohibits plans from charging fees for copies of pension
benefit statements provided on paper. Prior to the passing of SECURE
2.0, plans were only prevented from charging a fee on the first copy.
This represents a transfer of costs from participants requesting
additional copies of pension benefit statements to plans.
This transfer would only affect copies beyond the first. The
Department does not have reliable data regarding the number of
participants requesting additional copies of their statements but
expects the share of participants to be relatively small. The
Department assumes that only participants who received paper statements
prior to the passage of SECURE 2.0 would request additional copies.
This is because participants who previously received electronic
statements, and who only began receiving paper disclosure as a result
of SECURE 2.0 and the proposal, would be unlikely to request additional
paper statements. Since requesting duplicate copies would require
active requests, the Department believes that this population is
unlikely to request multiple copies of their statements.
As discussed in the Costs section, the Department estimates that
3.9 percent of participants received paper statements prior to SECURE
2.0. In this analysis, the Department assumes that 10 percent of these
participants will request a duplicate statement per year. Comments are
requested on this assumption.
The Department's estimate for this transfer is displayed in Table
10 below. For more information on the material and distribution cost
estimates, refer to section VI.H(3) of the Cost section.
Table 10--Transfers
----------------------------------------------------------------------------------------------------------------
Material
Description Affected entities Pages costs per Distribution Material and
page costs postage transfer
(A)................. (B) (C) (D) (A x [(B x C) +
D])
----------------------------------------------------------------------------------------------------------------
Duplicate Statements for DB Plan 81,182 = 32,112,433 1 $0.05 $1.00 $77,429
Participants. DB Participants x
3.9% Receiving
Paper Statements
Pre-Statute x 10%
Receiving Duplicate
Statements Per Year.
Duplicate Statements for DC Plan 299,480 = 5 0.05 1.00 374,349
Participants. 122,160,103 DC
Participants and
Beneficiaries x
3.9% Receiving
Paper Statements
Pre-Statute x 10%
Receiving Duplicate
Statements Per Year.
------------------------------------------------------------------------------
Total........................ 380,661............. ......... .......... ............ 451,779
----------------------------------------------------------------------------------------------------------------
J. Regulatory Alternatives
In accordance with Executive Order 12866, the Department considered
alternative regulatory approaches to achieve the goal of the proposal.
(1) Amend the 2020 Safe Harbor To Clarify Existing Provisions
First, the Department considered explicitly adding additional
provisions to address SECURE 2.0's directive that the 2020 safe harbor:
1. Allow plans to furnish duplicate electronic copies of paper
statements, as directed in section 338(b)(2)(D) of SECURE 2.0,
2. Require all ERISA-required disclosures provided electronically
to include an explanation of how to request the disclosures in paper
form, as directed in section 338(b)(2)(E) of SECURE 2.0.
However, the Department believes the existing safe harbors already
accomplish
[[Page 9227]]
these requirements. Additionally, should the Department include
additional provisions on these topics in the proposal, then plans may
be required to update their disclosures if they differed from the new
requirements of the safe harbor. This would incur additional costs on
plans without further advancing the goals of the proposal and was thus
rejected.
(2) Expand Disclosure Requirements to All Paper Statements
The Department also considered requiring that all pension benefit
statements furnished on paper include a statement of how to obtain
electronic disclosure, rather than just limiting this requirement to
the statements required to be provided on paper under SECURE 2.0. This
would have benefits for regulatory uniformity, as it would provide a
blanket requirement across all pension benefit statements. However,
limiting the disclosure requirement just to these required statements
reduces the burden on plans and participants while still fulfilling
SECURE 2.0's mandate. Since this alternative would have raised costs
without furthering the goals of this proposal, it was rejected.
(3) Do Not Issue Proposal
The Department is unable to consider a ``no-change'' alternative
scenario. This proposal addresses the directive established by Congress
under SECURE 2.0 and aligns the Department's safe harbors with SECURE
2.0. Absent this proposal, the Department would be in violation of
SECURE 2.0 and the Department's safe harbors would be inconsistent with
it, resulting in regulatory uncertainty. As a result, a no-change
scenario does not accomplish the goals of this proposal and was
rejected.
(4) Uncertainty
The largest source of uncertainty in these estimates originates
from assumptions surrounding the prevalence of electronic disclosure
and the share of plans and participants relying on the 2002 and 2020
safe harbors. The Department has assumed that most plans rely on the
2020 safe harbor for some or all participants and that a smaller share
rely on the 2002 safe harbor for some or all participants. The
Department believes that more plans rely on the 2020 safe harbor
because it is more flexible, and allows plans to provide electronic
disclosure to participants who are not wired-at-work or have not
affirmatively opted in.
The Department acknowledges that plan behavior could affect these
assumptions. The Department assumes that plans will furnish pension
benefit statements to all wired-at-work individuals under the 2002 safe
harbor to avoid the paper benefit requirement. However, if plans
instead choose to rely on the 2020 safe harbor for all participants and
encourage participants to opt out of the paper disclosure, then this
could lead to a higher share of plans and participants under the 2020
safe harbor. Alternatively, the wired-at-work population or the usage
of the 2002 safe harbor pre-statute could be higher than the
Department's estimate, which would lead to a higher share of plans and
participants under the 2002 safe harbor.
The only requirement that applies to the 2002 safe harbor is a one-
time notice notifying newly-eligible participants or beneficiaries that
they will receive electronic delivery. Meanwhile, the 2020 safe harbor
requires plans to provide certain pension benefit statements on paper,
provide an additional explanation for these statements, and forbids
them from charging fees for additional copies of paper statements.
Therefore, the marginal cost on plans and participants relying on the
2002 safe harbor is lower than the 2020 safe harbor. Thus, if the
proportion of plans using the 2002 safe harbor is larger, then the
overall cost of SECURE 2.0 would be lower. Conversely, if the
proportion of plans using the 2002 safe harbor relative to the 2020
safe harbor is lower, the overall costs would be higher.
To demonstrate this, the Department includes its analyses for a
range of scenarios in Table 11 below. These scenarios depict uniform
usage of the 2020 safe harbor, uniform usage of the 2002 safe harbor,
and an even split of the two safe harbors compared against the
assumptions used in the Regulatory Impact Analysis. These scenarios in
Table 11 below provide the maximum theoretical range for each of these
values and thus demonstrate the largest possible effects that these
assumptions could have.
TABLE 11--Uncertainty Analysis
----------------------------------------------------------------------------------------------------------------
All plans use
Regulatory All plans and All plans and both safe
impact participants participants harbors,
analysis use 2020 safe use 2002 safe participants
assumptions harbor harbor are split
evenly
----------------------------------------------------------------------------------------------------------------
Share of Participants Covered Under 2020 Safe 62.60% 100.00% 0.00% 50.00%
Harbor.........................................
Share of Participants Covered Under 2002 Safe 37.40% 0.00% 100.00% 50.00%
Harbor.........................................
Share of Plans Using 2020 Safe Harbor........... 96.10% 100.00% 0.00% 100.00%
Share of Plans Using 2002 Safe Harbor........... 37.40% 0.00% 100.00% 100.00%
----------------------------------------------------------------------------------------------------------------
Costs
----------------------------------------------------------------------------------------------------------------
Rule Review (Year 1 Only)....................... $60,610,921 $60,610,921 $60,610,921 $60,610,921
Preparation: 2020 Safe Harbor Explanation (Year $14,586,856 $15,152,730 $0 $15,152,730
1 Only)........................................
Preparation: 2002 Safe Harbor Notice (Year 1 $6,069,717 $0 $15,152,730 $15,152,730
Only)..........................................
Add Contact Info: 2020 Safe Harbor Explanation $4,059,862 $4,224,622 $0 $4,224,622
(Year 1 Only)..................................
Add Contact Info: 2002 Safe Harbor Notice (Year $1,580,009 $0 $4,224,622 $4,224,622
1 Only)........................................
---------------------------------------------------------------
Subtotal: Costs (Year 1 Only)............... $86,907,365 $79,988,274 $79,988,274 $99,365,627
Printing and Postage Cost Additional Pension $47,024,610 $74,835,538 $0 $37,417,769
Benefit Statements (Year 1)....................
Printing and Postage Cost Additional Pension $40,736,877 $64,829,163 $0 $32,414,582
Benefit Statements (Year 2) \1\................
---------------------------------------------------------------
Total Costs in Year 1....................... $133,931,975 $154,823,812 $79,988,274 $136,783,396
Total Costs in Year 2....................... $40,736,877 $64,829,163 $0 $32,414,582
----------------------------------------------------------------------------------------------------------------
[[Page 9228]]
Transfers
----------------------------------------------------------------------------------------------------------------
Total Transfers (Annual)........................ $451,779 $719,220 $0 $359,610
----------------------------------------------------------------------------------------------------------------
\1\ Years 1 and 2 are presented to show the effects of different assumptions on the first year and long-term
costs. Over time, the costs associated with additional pension benefit statements will come down as the
electronic disclosure rate continues to rise. To see the cost trends for this requirement over all ten years,
see Table 9.
VII. Paperwork Reduction Act
The Department of Labor, as part of its continuing effort to reduce
paperwork and respondent burden, conducts a preclearance consultation
program to provide the general public and Federal agencies with an
opportunity to comment on proposed and continuing collections of
information in accordance with the Paperwork Reduction Act of 1995 (PRA
95) (44 U.S.C. 3506(c)(2)(A)). This helps to ensure that requested data
can be provided in the desired format, reporting burden (time and
financial resources) is minimized, collection instruments are clearly
understood, and the impact of collection requirements on respondents
can be properly assessed.
Currently, the Department is soliciting comments concerning the
proposed amendments to the information collection requests (ICR) with
the control numbers 1210-0166 and 1210-0121 incorporated in the
proposed rule relating to use of electronic communication by employee
benefit plans. A copy of the ICRs may be obtained by contacting the PRA
addressee shown below or at RegInfo.gov.
The Department has submitted a copy of the proposed amendments to
the information collections to the Office of Management and Budget
(OMB) in accordance with 44 U.S.C. 3507(d) for review of its
information collections. The Department and OMB are particularly
interested in comments that:
Evaluate whether the collection of information is
necessary for the proper performance of the functions of the agency,
including whether the information will have practical utility
Evaluate the accuracy of the agency's estimate of the
burden of the collection of information, including the validity of the
methodology and assumptions used,
Enhance the quality, utility, and clarity of the
information to be collected, and
Minimize the burden of the collection of information on
those who are to respond, including through the use of appropriate
automated, electronic, mechanical, or other technological collection
techniques or other forms of information technology, e.g., permitting
electronic submission of responses.
Commenters may send their views on the Departments' PRA analysis in
the same way they send comments in response to the proposed rule as a
whole (for example, through the www.regulations.gov website), including
as part of a comment responding to the broader proposed rule. Comments
are due by April 27, 2026 to ensure their consideration.
ICRs are available at RegInfo.gov (reginfo.gov/public/do/PRAMain).
Requests for copies of the ICR can be sent to the PRA addressee:
By mail: PRA Officer, Office of Research and Analysis, Employee
Benefits Security Administration, U.S. Department of Labor, 200
Constitution Avenue NW, Room N-5718, Washington, DC 20210.
By email: [email protected].
The following burden estimates show the burden of the currently
approved information collection and also the additional burden imposed
by the changes made by SECURE 2.0 and the proposed regulations.
Therefore, the total estimated burden is larger than the incremental
burden shown in the RIA.
A. Control Number 1210-0166 Pension Benefits Statement
Section 338 of SECURE 2.0 amends section 105(a)(2) of ERISA to
require the provision of certain pension benefit statements on paper,
as well as amending the Department's 2002 and 2020 safe harbors. These
amendments include a required initial notice for participants and
beneficiaries covered under the 2002 safe harbor who first become
eligible to participate in the plan or for benefits after December 31,
2025, as well as an additional explanation for participants receiving
the newly required paper statements under the 2020 safe harbor.
Section 105(a)(1) of ERISA requires pension benefit statements to
be sent:
at least once each quarter, in the case of a defined
contribution plan that permits participants and beneficiaries to direct
their investments;
at least once each year, in the case of a defined
contribution plan that does not permit participants and beneficiaries
to direct their investments;
at least once every 3 years or upon request in the case of
defined benefit plans.
Additionally, section 105(a)(3)(A) of ERISA permits plan
administrators of defined benefit plans to fulfill the requirements of
section 105(a)(1)(B)(i) by providing participants with a notice of
statement availability on an annual basis.
The Department has an OMB approved information collection
associated with the pension benefit statement under control number
1210-0166 that accounts for the burden of the general requirement to
furnish pension benefit statements. This analysis focuses on the
additional hour and cost burden associated with the new requirements of
section 338.
(1) Baseline Cost of Preparing and Delivering Pension Benefit
Statements
Based on discussions with the regulated community in 2021, the
Department believes the all-inclusive cost to produce pension benefit
statements for defined contribution plan participants and beneficiaries
on paper was approximately $1.50 per statement, while the all-inclusive
cost to produce pension benefit statements for defined benefit plan
participants on paper is approximately $15.00 per statement. The
Department believes that administrators of frozen defined benefit plans
will provide the notice of statement availability, as described in
section 105(a)(3)(A), to frozen defined benefit plan participants in
lieu of a pension benefit statement, at an all-
[[Page 9229]]
inclusive cost of approximately $0.75 per notice. The Department has
inflation-adjusted these figures to $1.71, $17.05, and $1.19,
respectively.\37\ The Department obtains the cost of these statements
delivered electronically by subtracting out the all-inclusive mass-
mailing cost estimate of $1.00 per piece, plus an additional 5 cents
per page. The baseline costs associated with the provision of pension
benefit statements is displayed in Table 12 below:
---------------------------------------------------------------------------
\37\ The Inflation adjusted value of $0.75 is $0.85. However, to
accommodate the updated mailing cost assumptions, the Department
increased the assumed cost for the notice of pension availability
from $0.75 to $1.05. This was then inflation adjusted to $1.19.
----------------------------------------------------------------------------------------------------------------
Material
Cost per Pages per and mailing
Disclosures disclosure disclosure costs per Equivalent cost
page
(A)................ (B) (C) (D) A x B or
A x ((C x D) + E)
----------------------------------------------------------------------------------------------------------------
DC Statement Preparation........ 464,444,095 = $0.46 ........... ........... $211,354,692
(114,094,664
participants in
self-directed
plans x 4
quarterly
statements) +
8,065,439 annual
statements for
participants not
in DC plans
without self-
direction.
Non-Frozen DB Statement 8,702,640 = 16.00 ........... ........... 139,248,349
Preparation. 26,107,919
participants in
non-frozen DB
Plans x 33.3%
receiving a
statement each
year.
Frozen DB Plan Statements 6,004,514 = 0.14 ........... ........... 861,943
Preparation. 6,004,514
participants in
frozen DB Plans x
receiving a notice
of statement
availability each
year.
DC Statement Distribution....... 18,113,320 paper ........... 5 \1\ $1.25 22,641,650
statements =
464,444,095 DC
Statements x 3.9%
delivered by paper.
DB Statement Distribution....... 339,403 paper ........... 1 1.05 356,373
statements =
8,702,640 non-
frozen DB
Statements x 3.9%
delivered by paper.
Frozen Statement Distribution 234,176 paper ........... 1 1.05 245,885
statements =
6,004,514 frozen
DB Statements x
3.9% delivered by
paper.
-------------------------------------------------------------------------------
........... ........... ........... 374,708,891
----------------------------------------------------------------------------------------------------------------
On top of this baseline burden, SECURE 2.0 and associated proposal
will add costs due to the provision of additional paper benefit
statements. The costs associated with providing the additional paper
benefit statements in the first year are displayed in detail in Table
13 below. The additional costs in Years 1-3 are then summarized in
Table 14 below.
Table 13--Additional Cost Burden To Prepare & Distribute Pension Benefit Statements
[Year 1 Detail]
--------------------------------------------------------------------------------------------------------------------------------------------------------
Material Distribution
Affected entities Pages per costs per costs per Total cost burden
disclosure page disclosure
(A).................................... (B) (C) (D) (A x [(B x C) + D])
--------------------------------------------------------------------------------------------------------------------------------------------------------
Distribution of Statements for DB Plans......... 3,872,016 = ((\1/3\) x 15,385,053 1 $0.05 $1.00 $4,065,617
Participants in non-frozen DB plans
under 2020 safe harbor + 3,523,231
Participants in frozen DB plans under
2020 safe harbor) x (96.1% Pre-Statute
E-Disclosure Rate-51.3% Post-Statute E-
Disclosure Rate).
Distribution of Statements for DC Plans......... 34,367,195 = 76,789,620 DC Participants 5 0.05 1.00 42,958,993
and Beneficiaries Covered by 2020 Safe
Harbor x (96.1% Pre-Statute E-
Disclosure Rate-51.3% Post-Statute E-
Disclosure Rate).
--------------------------------------------------------------
Total....................................... ....................................... ........... .......... .............. 47,024,610
--------------------------------------------------------------------------------------------------------------------------------------------------------
[[Page 9230]]
Table 14--Additional Cost Burden To Prepare & Distribute Pension Benefit Statements
[Years 1-3]
----------------------------------------------------------------------------------------------------------------
Years
---------------------------------------------------------------------
3-Year
Pre-statute 1 2 3 average
----------------------------------------------------------------------------------------------------------------
2020 Safe Harbor Electronic Disclosure 96.10% 51.35% 57.33% 60.24% 56.31%
Rate (62.6% of participants).............
2002 Safe Harbor Electronic Disclosure 96.10% 96.10% 96.10% 96.10% 96.10%
Rate (37.4% of participants).............
Weighted Average Electronic Disclosure 96.10% 67.97% 71.73% 73.56% 71.08%
Rate.....................................
Change in Electronic Disclosure........... 0.00% -28.13% -24.37% -22.54% -25.02%
Additional Paper DB Statements............ 0 3,872,016 3,354,283 3,102,380 3,442,893
Additional Paper DC Statements............ 0 34,367,195 29,771,904 27,536,066 30,558,388
Additional Paper DB Statement Cost (1 $0 $4,065,617 $3,521,997 $3,257,498 $3,615,037
Page)....................................
Additional Paper DC Statement Cost (5 $0 $42,958,993 $37,214,880 $34,420,082 $38,197,985
Pages)...................................
---------------------------------------------------------------------
Total Additional Costs................ $0 $47,024,610 $40,736,877 $37,677,581 $41,813,022
----------------------------------------------------------------------------------------------------------------
Table 15--Pension Benefit Statement Burden Summary
------------------------------------------------------------------------
Hourly burden Cost burden
------------------------------------------------------------------------
Baseline Burden to Distribute Benefit ............... $374,708,891
Statements............................
Additional Burden Added by Secure 2.0 ............... 41,813,022
and Proposal..........................
Other Burden Associated With This 162 148,837
Control Number \1\....................
--------------------------------
Total.............................. 162 416,670,750
------------------------------------------------------------------------
\1\ A description of how the burden is calculated may be obtained by
contacting the PRA addressee or by going to www.reginfo.gov/public/do/PRAMain PRAMain and searching for OMB control number 1210-0166.
Agency: Employee Benefits Security Administration, Department of
Labor.
Title: Pension Benefit Statement.
Type of Review: Revision of currently approved collection of
information.
OMB Control Number: 1210-0166.
Affected Public: Private Sector: business or other for-profit and
not-for-profit institutions.
Respondents: 801,370.
Responses: 479,151,249 annually.
Frequency of Response: Quarterly, Annually, Triennially.
Estimated Total Burden Hours: 162.
Estimated Total Costs: $416,670,750.
B. Control Number 1210-0121 Consent To Receive Employee Benefit Plan
Disclosures Electronically
The Department has an OMB approved information collection
associated with previous electronic disclosure rules under control
number 1210-0121. SECURE 2.0 adds additional disclosure requirements
that need to be added to this collection. Employee benefit plan
administrators utilizing the 2002 safe harbor will need to furnish an
initial notice of electronic availability, which notifies participants
of their right to receive documents on paper, to all participants who
first become eligible to participate, and beneficiaries who first
become eligible for benefits, after December 31, 2025.
The Department made a number of assumptions and calculations
regarding electronic disclosure rates and the usage of the 2002 and
2020 safe harbor, which are discussed in detail in the regulatory
impact analysis. The Department assumes that 37.4 percent of plans and
participants \38\ will be affected by the changes to the 2002 safe
harbor. The costs associated with this requirement are displayed in
Table 15 below:
---------------------------------------------------------------------------
\38\ Generally, only participants, not beneficiaries, are
eligible to receive electronic disclosures under the wired-at-work
provision of the 2002 safe harbor. SECURE 2.0 requires an initial
notice for newly eligible participants and beneficiaries who first
become eligible for benefits after December 31, 2025. However, for
the purposes of this burden analysis, only wired-at-work
participants are assumed to receive the initial paper notice, as
beneficiaries who have affirmatively consented to electronic
disclosure under the 2002 safe harbor will likely receive the
existing advance statement on paper instead. See section II.B above.
Table 15--Hour Burden and Equivalent Cost for Preparation of 2002 Safe Harbor Notice
----------------------------------------------------------------------------------------------------------------
Hours per Hourly Total Equivalent
Description Affected entities entity wage hours cost
(A)..................... (B) (C) (A x B) (A x B x C)
----------------------------------------------------------------------------------------------------------------
Notice Preparation (Service Providers) 3,552 Service Providers. 1 $181.06 3,552 $643,125
Notice Preparation (In-House)......... 29,971 = 299,712 Plans x 1 181.06 29,971 5,426,592
10% Not Using a Service
Provider.
Adding Contact and Plan Information to 269,741 = 299,712 Plans 5/60 70.29 22,478 1,580,009
Drafted Notices. x 90% Using a Service
Provider.
-----------------------------------------------
Total............................. ........................ .......... ......... 56,002 7,649,726
----------------------------------------------------------------------------------------------------------------
[[Page 9231]]
Plans using the 2020 safe harbor for electronic disclosure will
also be required to make changes under this proposal. Employee benefit
plan administrators utilizing the 2020 safe harbor shall:
1. Furnish one pension benefit per year on paper to defined
contribution participants and beneficiaries, and one statement per
three years on paper to defined benefit participants,
2. Establish a system allowing participants to opt out of these
mandatory paper disclosures, including an explanation sent with the
statement which explains how to receive these documents electronically,
3. Remove all policies that would charge participants for paper
pension benefit statements.
The costs associated with preparing the explanation of how to opt
out of this mandatory paper benefit statement are included in Table 16
below.
Table 16--Hour Burden and Equivalent Cost for Preparation of Explanations for 2020 Safe Harbor
----------------------------------------------------------------------------------------------------------------
Hours per Hourly Total Equivalent
Description Affected entities entity wage hours cost
(A)..................... (B) (C) (A x B) (A x B x C)
----------------------------------------------------------------------------------------------------------------
Explanation Preparation (Service 3,552 Service Providers. 1 $181.06 3,552 $643,125
Providers).
Explanation Preparation (In-House).... 77,012 = 770,117 Plans x 1 181.06 77,012 13,943,731
10% Not Using a Service
Provider.
Adding Contact and Plan Information to 693,105 = 770,117 Plans 5/60 70.29 57,759 4,059,862
Drafted Explanations. x 90% Using a Service
Provider.
-----------------------------------------------
Total............................. ........................ .......... ......... 138,322 18,646,718
----------------------------------------------------------------------------------------------------------------
In addition to the new requirements included in SECURE 2.0, the
existing collection also includes existing burdens for the notice of
internet availability, maintaining a website for electronic disclosure,
and preparing a list of bounce back emails. These existing provisions
account for 1,076,344 burden hours and $2,930,343 additional costs.
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: 833,328.
Responses: 59,688,464.
Estimated Total Burden Hours: 1,270,344.
Estimated Total Costs: $2,930,244.
VIII. Regulatory Flexibility Act
The Regulatory Flexibility Act (RFA) \39\ imposes certain
requirements with respect to federal rules that are subject to the
notice and comment requirements of section 553(b) of the Administrative
Procedure Act.\40\ Under section 603 of the RFA, agencies must submit
an initial regulatory flexibility analysis (IRFA) of a proposal that is
likely to have a significant economic impact on a substantial number of
small entities, such as small businesses, organizations, and
governmental jurisdictions. The Department provides its IRFA of the
proposed rule, below.
---------------------------------------------------------------------------
\39\ 5 U.S.C. 601 et seq.
\40\ 5 U.S.C. 601(2), 603(a); also see 5 U.S.C. 551.
---------------------------------------------------------------------------
A. Need for and Objectives of the Rule
As discussed earlier in this preamble, section 338 of SECURE 2.0
directed the Department to promulgate this proposal to update its
electronic disclosure safe harbors. Not promulgating this proposal
would violate the directive established by SECURE 2.0 and leave the
existing safe harbors inconsistent with its requirements.
As discussed in the RIA, a survey by the AARP \41\ found that a
majority of participants would like to receive at least one statement
per year on paper, and participants that receive documents on paper are
more likely to fully review them than participants that exclusively
receive electronic statements. Despite this, the majority of
participants who receive paper statements do so because it was a
default plan option, rather than affirmatively opting-in. By requiring
plans to change their default plan options to include at least one
paper statement per year, plans can overcome a general preference to
maintain their current situation and encourage more participants to
receive at least one paper statement.
---------------------------------------------------------------------------
\41\ Brown, S. Kathi. Retirement Account Statements: Paper or
Electronic?, AARP Research, May 2022, https://doi.org/10.26419/res.00529.00. Accessed March 27, 2025.
---------------------------------------------------------------------------
This effect will be particularly profound amongst older Americans,
lower-income Americans, and Americans without access to the internet at
home, who are all more likely to indicate a preference for paper
pension benefit statements.
B. Affected Small Entities.
For purposes of the IRFA, the Department considers employee benefit
plans with fewer than 100 participants to be small entities.\42\ The
basis of this definition is found in section 104(a)(2) of ERISA, which
permits the Secretary of Labor to prescribe simplified annual reports
for plans that cover fewer than 100 participants. Under section
104(a)(3) of ERISA, the Secretary may also provide for exemptions or
simplified annual reporting and disclosure for welfare benefit plans.
Pursuant to the authority of section 104(a)(3), the Department has
previously issued (see 29 CFR 2520.104-20, Sec. 2520.104-21, Sec.
2520.104-41, Sec. 2520.104-46, and Sec. 2520.104b-10) simplified
reporting provisions and limited exemptions from reporting and
disclosure requirements for small plans, including unfunded or insured
welfare plans that satisfy certain requirements.
---------------------------------------------------------------------------
\42\ The Department consulted with the Small Business
Administration in making this determination, as required by 5 U.S.C.
603(c) and 13 CFR 121.903(c). Memorandum received from the U.S.
Small Business Administration, Office of Advocacy on July 10, 2020.
---------------------------------------------------------------------------
While some large employers have small plans, small plans are
generally maintained by small employers. Thus, the Department believes
that assessing the impact of this proposed exemption on small plans is
an appropriate way to evaluate its effect on small entities. The
definition of small entity applied for this purpose differs, however,
from a definition of small business based on size standards promulgated
by the Small
[[Page 9232]]
Business Administration \43\ pursuant to the Small Business Act.\44\
Therefore, the Department requests comments on the appropriateness of
the size standard used in evaluating the impact of this proposed rule
on small entities.
---------------------------------------------------------------------------
\43\ 13 CFR 121.201 (2011).
\44\ 15 U.S.C. 631 et seq. (2011).
---------------------------------------------------------------------------
The Department's data on small plans and participants in small
plans is displayed in Table 16 below. In addition, the corresponding
affected entities are described in Table 17 below. For more information
regarding how the affected entities were determined, see section (F) of
the RIA.
Table 16--General Data
------------------------------------------------------------------------
Description Assumption Source
------------------------------------------------------------------------
Number of Small Defined 663,107 2022 Form 5500 Data.
Contribution (DC) Plans.
Number of Small Defined Benefit 40,117 2022 Form 5500 Data.
(DB) Plans.
All Participants in Small Plans.. 14,588,887 2022 Form 5500 Data.
Service Providers for Accounting, 3,552 2022 Schedule C
Actuarial Services, and Plan Data.
Administration Services.
Small Plan Participants under 263,393 37.4% of
2002 Safe Harbor. Participants in
Small Plans x 5%
Newly-Eligible for
Benefits.
Small Plan Participants and 9,318,462 62.6% of
Beneficiaries under 2020 Safe Participants in
Harbor. Small Plans and all
beneficiaries.
--------------------------------------
Subtotal: Participants and 9,581,855 Participants in
Beneficiaries in Small Plans small plans covered
Affected by the Proposal. by either safe
harbor.
------------------------------------------------------------------------
Table 17--Affected Small Plans
------------------------------------------------------------------------
Number of
Affected small plans Description small plans
------------------------------------------------------------------------
Plans Using 2002 Safe Harbor...... 37.4% of Small Plans 263,006
Plans Using 2020 Safe Harbor...... 96.1% of Small Plans 675,798
-------------------------------------
Subtotal: Affected Small Plans 100% of Small Plans. 703,224
------------------------------------------------------------------------
C. Projected Reporting, Recordkeeping, and Other Compliance
Requirements
As discussed in section H.2 of the regulatory impact analysis,
small plans utilizing the 2002 safe harbor will now be required to send
an initial notice to participants who first become eligible to
participate, and beneficiaries who first become eligible for benefits,
after December 31, 2025. Small plans utilizing the 2020 safe harbor
will be required to begin providing some pension benefit statements on
paper and include an additional explanation of how to receive these
statements electronically. They will also be prohibited from charging
fees for additional paper copies of pension benefit statements. All
pension plans will be required to review and implement the proposal.
The Department's estimates for these requirements in the first year are
in Tables 18-21 below.
Table 18--Cost Pertaining To Rule Review
----------------------------------------------------------------------------------------------------------------
Hours per Hourly Total Equivalent
Description Affected entities entity labor cost hours cost
(A).................... (B) (C) (A x B) (A x B x C)
----------------------------------------------------------------------------------------------------------------
Rule Review (Service Providers)...... 3552 Service Providers. 4 $181.06 14,208 $2,572,500
Rule Review (In-House)............... 70,322 = 703,224 Small 4 181.06 281,290 50,930,295
Plans x 10% Not Using
a Service Provider.
-------------------------------------------------
Total............................ ....................... .......... .......... 295,498 53,502,795
----------------------------------------------------------------------------------------------------------------
Table 19--Cost for Preparation of 2002 Safe Harbor Notice
----------------------------------------------------------------------------------------------------------------
Hours per Hourly Total Equivalent
Description Affected entities entity labor cost hours cost
(A).................... (B) (C) (A x B) (A x B x C)
----------------------------------------------------------------------------------------------------------------
Notice Preparation (Service 3,552 Service Providers 1 $181.06 3,552 $643,125
Providers).
Notice Preparation (In-House)........ 26,301 = 263,006 Small 1 181.06 26,301 4,761,983
Plans x 10% Not Using
a Service Provider.
[[Page 9233]]
Adding Contact and Plan Information 236,705 = 263,006 Small 5/60 70.29 19,725 1,386,501
to Drafted Notices. Plans x 90% Using a
Service Provider.
-------------------------------------------------
Total............................ ....................... .......... .......... 49,578 6,791,608
----------------------------------------------------------------------------------------------------------------
Table 20--Cost for Preparation of 2020 Safe Harbor Explanation
----------------------------------------------------------------------------------------------------------------
Hours per Hourly Total Equivalent
Description Affected entities entity labor cost hours cost
(A).................... (B) (C) (A x B) (A x B x C)
----------------------------------------------------------------------------------------------------------------
Notice Preparation (Service 3,552 Service Providers 1 $181.06 3,552 $643,125
Providers).
Notice Preparation (In-House)........ 67,580 = 675,798 Small 1 181.06 67,580 12,236,003
Plans x 10% Not Using
a Service Provider.
Adding Contact and Plan Information 608,218 = 675,798 Small 5/60 70.29 50,685 3,562,639
to Drafted Notices. Plans x 90% Using a
Service Provider.
-------------------------------------------------
Total............................ ....................... .......... .......... 121,817 16,441,768
----------------------------------------------------------------------------------------------------------------
Table 21--Cost for Distribution of Additional Paper Benefit Statements for 2020 Safe Harbor
[Year 1]
----------------------------------------------------------------------------------------------------------------
Material Distribution
Description Affected entities Pages per costs per costs per Total cost
disclosure page disclosure
(A)................. (B) (C) (D) (A x [(B x C) +
D])
----------------------------------------------------------------------------------------------------------------
Distribution of Statements 62,046 = ((\1/3\) x 1 $0.05 $1.00 $65,149
for DB Plans. 244,378
Participants in
Small Non-frozen DB
Plans Under 2020
Safe Harbor +
57,177 Participants
in Small Frozen DB
Plans Under 2020
Safe Harbor) x
(96.1% Pre-Statute
E-Disclosure Rate-
51.3% Post-Statute
E-Disclosure Rate).
Distribution of Statements 4,035,517 = 5 0.05 1.00 5,044,396
for DC Plans. 9,016,908 DC
Participants and
Beneficiaries in
Small Plans Covered
by 2020 Safe Harbor
x (96.1% Pre-
Statute E-
Disclosure Rate-
51.3% Post-Statute
E-Disclosure Rate).
------------------------------------------------------------
Total.................... .................... ........... .......... .............. 5,109,545
----------------------------------------------------------------------------------------------------------------
Table 22--Costs of Duplicate Paper Statements to Small Plans \1\
----------------------------------------------------------------------------------------------------------------
Material Distribution
Description Affected entities Pages per costs per costs per Total cost
disclosure page disclosure
(A)................. (B) (C) (D) (A x [(B x C) +
D])
----------------------------------------------------------------------------------------------------------------
Duplicate Statements for DB 1,176 = 301,554 DB $1.00 $0.05 $1.00 $1,235
Plan Participants. Participants in
small plans under
the 2020 safe
harbor x 3.9%
Receiving Paper
Statements Pre-
Statute x 10%
Receiving Duplicate
Statements per Year.
Duplicate Statements for DC 35,166 = 9,016,908 5.00 0.05 1.00 43,957
Plan Participants. DC Participants in
small plans under
the 2020 safe
harbor x 3.9%
Receiving Paper
Statements Pre-
Statute x 10%
Receiving Duplicate
Statements per Year.
------------------------------------------------------------
Total.................... 36,342.............. ........... .......... .............. 45,192
----------------------------------------------------------------------------------------------------------------
\1\ These costs were displayed as transfers from plans to participants in Table 10 of the RIA. However, since
this impact on small plans is viewed as a cost from the small plans point of view the share of the transfer
for small plans is included here as an additional impact.
[[Page 9234]]
The only cost in subsequent years arising from SECURE 2.0 are the
costs of the additional paper benefit statements required under the
2020 safe harbor and the costs of the prohibition on charging
participants for additional copies of paper benefit statements. The
cost of furnishing the additional paper benefit statement will go down
over time as more participants switch to electronic disclosure,
eventually approaching a long-term electronic disclosure rate of 63
percent. The costs borne as a result of the prohibition on charging for
duplicate statements is expected to hold steady over the analysis
period. These assumptions are discussed in detail in the RIA. These
costs over time are displayed in Table 22 below.
Table 23--Ten-Year Total Costs Associated With Statute and Proposal
--------------------------------------------------------------------------------------------------------------------------------------------------------
Electronic disclosure rates Statute and proposal costs
----------------------------------------------------------------------------------------------------
Change to
2020 Safe 2020 Safe paper Adding contact Distribution Total
Years harbor harbor disclosure Rule Notice and and plan cost for costs \1\
electronic paper rate from review explanation information to additional
disclosure disclosure statute and preparation drafted paper benefit
rate (%) rate (%) proposal (%) notices statements
--------------------------------------------------------------------------------------------------------------------------------------------------------
Pre-Statute............................ 96.1 3.9 0.0 $0 $0 $0 $0 $0
1...................................... 51.3 48.7 44.8 53,502,795 18,284,236 4,949,140 5,154,737 81,890,909
2...................................... 57.3 42.7 38.8 0 0 0 4,471,532 4,471,532
3...................................... 60.2 39.8 35.9 0 0 0 4,139,119 4,139,119
4...................................... 61.7 38.3 34.4 0 0 0 3,977,383 3,977,383
5...................................... 62.3 37.7 33.8 0 0 0 3,898,691 3,898,691
6...................................... 62.7 37.3 33.4 0 0 0 3,860,403 3,860,403
7...................................... 62.8 37.2 33.3 0 0 0 3,841,774 3,841,774
8...................................... 62.9 37.1 33.2 0 0 0 3,832,710 3,832,710
9...................................... 63.0 37.0 33.1 0 0 0 3,828,300 3,828,300
10..................................... 63.0 37.0 33.1 0 0 0 3,826,154 3,826,154
--------------------------------------------------------------------------------------------------------------------------------------------------------
\1\ Cost estimates are not inflation adjusted and are presented in constant dollars.
The Department also analyzed these costs as a share of plan assets
across various sizes of small plans and displayed them in Table 23
below. This data is presented in multiple scenarios to examine the
burden to small firms under a variety of assumptions. The fixed cost
column describes the costs as a share of plan assets for small plans to
read SECURE 2.0 and proposal, as well as prepare any required notices
and explanations. This is presented in three columns based on which
safe harbor the plan uses, or if it uses both. If a small plan uses the
2020 safe harbor, then there will also be costs which will vary based
on the number of participants in the plan, the type of plan, and its
electronic disclosure requirements pre-statute. As such, the variable
costs column presents a range of estimates based on the number of
participants in each plan. This range assumes that all of the
participants in the plan are covered under the 2020 safe harbor, and
that all were previously receiving electronic disclosure. Thus, this
variable cost column should be viewed as the maximum possible extent of
these variable costs, displayed as a share of assets. These are the
only costs to firms that will persist beyond the first year. Thus, to
estimate the per-firm cost of a plan using the 2020 safe harbor in the
first year, the variable cost estimate should be added to the fixed
cost estimates for the 2020 safe harbor. The cost in subsequent years
would be the variable cost only. The costs for the 2002 safe harbor are
only in the first year. Under this range of analysis, the costs per
firm range from a minimum of approximately 0.002 percent of plan assets
to a maximum of approximately 0.021 percent of plan assets. In
subsequent years, the maximum burden would be 0.003 percent of plan
assets.
Table 24--Costs Per Plan as a Share of Plan Assets
--------------------------------------------------------------------------------------------------------------------------------------------------------
Fixed first year costs Annual variable costs \1\
Mean assets ---------------------------------------------------------------------------------
Participant tiers Plan count per plan 2002 Safe 2020 Safe Both safe
Harbor harbor harbors 2020 Safe harbor
--------------------------------------------------------------------------------------------------------------------------------------------------------
Plans with 1-5 Participants............. 121,833 $596,214 0.017% 0.017% 0.021% From 0.000% to 0.001%.
($102) ($100) ($126) (From $1 to $6).
Plans with 6-10 Participants............ 153,541 764,808 0.013% 0.013% 0.017% From 0.001% to 0.002%.
($102) ($100) ($126) (From $6 to $13).
Plans with 11-20 Participants........... 158,608 1,086,263 0.009% 0.009% 0.012% From 0.001% to 0.002%.
($102) ($100) ($126) (From $12 to $25).
Plans with 21-40 Participants........... 126,267 1,758,726 0.006% 0.006% 0.007% From 0.001% to 0.003%.
($102) ($100) ($126) (From $22 to $50).
Plans with 41-60 Participants........... 57,420 2,743,041 0.004% 0.004% 0.005% From 0.002% to 0.003%.
($102) ($100) ($126) (From $43 to $75).
Plans with 61-80 Participants........... 33,230 3,679,958 0.003% 0.003% 0.003% From 0.002% to 0.003%.
($102) ($100) ($126) (From $64 to $100).
[[Page 9235]]
Plans with 81-100 Participants.......... 21,378 4,723,015 0.002% 0.002% 0.003% From 0.002% to 0.003%.
($102) ($100) ($126) (From $85 to $125).
--------------------------------------------------------------------------------------------------------------------------------------------------------
\1\ Annual Costs vary based on number of participants and plan types. The presented ranges depict a costs for a DB plan with the minimum number of
participants, and a DC plan with the maximum number of participants. This presents the lowest and highest possible value for each category.
The previous table included the assumption used in the regulatory
impact analysis that 90 percent of plans would rely on service
providers for rule review, notice preparation, and other compliance
support. The Department believes this assumption is reasonable as many
smaller firms do not have the resources to conduct these services in-
house. However, the Department also did a separate analysis assuming
that plans did all of these services in-house, which is displayed in
Table 24 below. Even in this unlikely case, the burden on small plans
would range from a minimum of approximately 0.019 percent of plan
assets to a maximum of approximately 0.183 percent of plan assets in
the first year. In subsequent years, the maximum burden would be 0.003
percent of plan assets.
Table 25--Costs Per Plan (In-House Only) as a Share of Plan Assets
--------------------------------------------------------------------------------------------------------------------------------------------------------
Fixed first year costs Annual variable costs \1\
Mean assets ---------------------------------------------------------------------------------
Participant tiers Plan count per plan 2002 Safe 2020 Safe Both safe
Harbor harbor harbors 2020 Safe harbor
--------------------------------------------------------------------------------------------------------------------------------------------------------
Plans with 1-5 Participants............. 121,833 $596,214 0.152% 0.152% 0.182% From 0.000% to 0.001%.
($905) ($905) ($1,086) (From $1 to $6).
Plans with 6-10 Participants............ 153,541 764,808 0.118% 0.118% 0.142% From 0.001% to 0.002%.
($905) ($905) ($1,086) (From $6 to $13).
Plans with 11-20 Participants........... 158,608 1,086,263 0.083% 0.083% 0.100% From 0.001% to 0.002%.
($905) ($905) ($1,086) (From $12 to $25).
Plans with 21-40 Participants........... 126,267 1,758,726 0.051% 0.051% 0.062% From 0.001% to 0.003%.
($905) ($905) ($1,086) (From $22 to $50).
Plans with 41-60 Participants........... 57,420 2,743,041 0.033% 0.033% 0.040% From 0.002% to 0.003%.
($905) ($905) ($1,086) (From $43 to $75).
Plans with 61-80 Participants........... 33,230 3,679,958 0.025% 0.025% 0.030% From 0.002% to 0.003%.
($905) ($905) ($1,086) (From $64 to $100).
Plans with 81-100 Participants.......... 21,378 4,723,015 0.019% 0.019% 0.023% From 0.002% to 0.003%.
($905) ($905) ($1,086) (From $85 to $125).
--------------------------------------------------------------------------------------------------------------------------------------------------------
\1\ Annual Costs vary based on number of participants and plan types. The presented ranges depict the costs for a DB plan with the minimum number of
participants, and a DC plan with the maximum number of participants. This presents the lowest and highest possible value for each category.
D. Duplicate, Overlapping, or Relevant Federal Rules
This proposal updates existing Departmental safe harbors to comply
with the provisions of SECURE 2.0. The Department is not aware of any
other rules that would duplicate, overlap, or be relevant to this
proposal.
E. Significant Alternatives Considered
Section 603 of the RFA requires the Department to consider
significant alternatives that would accomplish the stated objective,
while minimizing any significant adverse impact on small entities. The
objective for this proposal is to narrowly address the requirements of
SECURE 2.0. Since SECURE 2.0 did not include any potential exemptions
for small plans, the Department could not consider an exemption for
small plans while still meeting the goals of the regulation. As
discussed in the RIA, the Department considered the following
alternatives.
(1) Amend the 2020 Safe Harbor To Clarify Existing Provisions
First, the Department considered explicitly adding additional
provisions to address SECURE 2.0's directive that the 2020 safe harbor:
1. Allow plans to furnish duplicate electronic copies of paper
statements, as directed in section 338(b)(2)(D) of SECURE 2.0; and
2. Require all ERISA-required disclosures provided electronically
to include an explanation of how to request the disclosures in paper
form, as directed in section 338(b)(2)(E) of SECURE 2.0.
However, the Department believes these requirements can be
accomplished under the existing safe harbors. Additionally, should the
Department include additional provisions on these topics in the
proposal, then plans may be required to update their disclosures if
they differ from the new requirements of the safe harbor. This would
incur additional costs on plans without further advancing the goals of
the proposal and was thus rejected.
(2) Expand Disclosure Requirements to All Paper Statements
The Department also considered requiring that all pension benefit
statements furnished on paper include a statement of how to obtain
electronic disclosure, rather than just limiting this requirement to
the statements required to be provided on paper under SECURE 2.0. This
would have benefits for regulatory uniformity, as it would provide a
blanket requirement across all pension benefit statements. However,
limiting the disclosure requirement just to these required statements
reduces the burden on plans and participants while
[[Page 9236]]
still fulfilling SECURE 2.0's mandate. Since this alternative would
have raised costs without furthering the goals of this proposal, it was
rejected.
(3) Do Not Issue Proposal
The Department is unable to consider a ``no-change'' alternative
scenario. The goal of this proposal is to fulfill the directive
established by Congress under SECURE 2.0 and align the Department's
safe harbors with SECURE 2.0. Absent this proposal, the Department
would be in violation of SECURE 2.0 and the Department's safe harbors
would be inconsistent with it, leading to regulatory uncertainty. As a
result, a no-change scenario does not accomplish the goals of this
proposal and was rejected.
IX. Unfunded Mandates Reform Act
Title II of the Unfunded Mandates Reform Act of 1995 \45\ requires
each Federal agency to prepare a written statement assessing the
effects of any Federal mandate in a proposal 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 proposal does not include any Federal mandate that will result in
such expenditures.
---------------------------------------------------------------------------
\45\ Public Law 104-4, 109 Stat. 48 (1995).
---------------------------------------------------------------------------
X. 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 proposal.
In the Department's view, this proposal 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.
List of Subjects
29 CFR Part 2520
Employee benefit plans, Pensions.
29 CFR Part 2560
Claims, Employee benefit plans, Pensions.
For the reasons stated in the preamble, the Department of Labor
proposes to amend 29 CFR chapter XXV 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, 1029-31, 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. Sec. 2520.101-5 also
issued under 29 U.S.C. 1021(f). Sec. 2520.101-6 also issued under 29
U.S.C. 1021(k). Sec. 2520.103-13 also issued under 29 U.S.C. 1023.
Secs. 2520.102-3, 2520.104b-1, 2520.104b-3, and 2520.104b-31 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. Div. T, Title III, Sec. 338, Pub.
L. 117-328, 136 Stat. 5373, 5374 (Dec. 29, 2022).
0
2. Amend Section 2520.104b-1 by:
0
a. Revising paragraph (c)(1)(iii);
0
b. Revising paragraph (c)(1)(iv); and
0
c. Adding paragraph (c)(3).
The revision and additions read as follows:
Sec. 2520.104b-1 Disclosure.
* * * * *
(c) * * *
(1) * * *
(iii) Notice is provided to each participant, beneficiary or other
individual, in electronic or non-electronic form, at the time a
document is furnished electronically, that apprises the individual of
the significance of the document when it is not otherwise reasonably
evident as transmitted (e.g., the attached document describes changes
in the benefits provided by your plan) and of the right to request and
obtain a paper version of such document, and upon request, the
participant, beneficiary or other individual is furnished a paper
version of the electronically furnished documents; and
(iv) An individual account plan and a defined benefit plan (in each
case, other than a one-participant retirement plan) may furnish the
pension benefit statement described in subparagraph (E) of section
105(a)(2) of the Act by electronic delivery only if, with respect to
participants who first become eligible to participate, and
beneficiaries who first become eligible for benefits, after December
31, 2025, in addition to meeting all other requirements under paragraph
(c) of this section, the plan furnishes each participant or beneficiary
a one-time initial notice on paper in written form, prior to the
electronic delivery of any pension benefit statement, of their right to
request that all documents required to be disclosed by the plan be
furnished on paper in written form.
* * * * *
(3) A plan administrator may satisfy the initial notice requirement
in paragraph (c)(1)(iv) of this section by furnishing the statement
described in paragraph (c)(2)(ii)(C) of this section on paper.
0
3. Amend Sec. 2520.104b-31 by:
0
a. Revising paragraph (c)(1);
0
b. Revising the second sentence of paragraph (f)(1)
0
c. Redesignating paragraph (l) as paragraph (m); and
0
d. Adding paragraph (l).
The revisions and addition read as follows:
29 CFR 2520.104b-31 Alternative method for disclosure through
electronic media--Notice-and-access.
* * * * *
(c) * * *
(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, or a pension benefit statement that must be furnished on paper
under subparagraph (E) of section 105(a)(2) of the Act.
* * * * *
(f) * * *
(1) * * * Only one paper copy of any covered document must be
provided free of charge under this section except for pension benefit
statements as provided in paragraph (l)(3) of this section, in which
case the plan may not charge any fee to a participant or beneficiary
for the delivery of any paper statements (see paragraph (l)(3) of this
section).
* * * * *
(l) Special rule for paper statements under subparagraph (E) of
section 105(a)(2) of the Act. With respect to a plan that furnishes
covered documents or statements electronically under this section--
[[Page 9237]]
(1) A participant or beneficiary who is a ``covered individual'' as
defined in paragraph (b) of this section shall be permitted the
opportunity to request that any pension benefit statement required to
be furnished on paper as required under subparagraph (E) of section
105(a)(2) of the Act shall instead be furnished by electronic delivery.
(2) Each pension benefit statement furnished on paper as required
under a plan pursuant to subparagraph (E) of section 105(a)(2) of the
Act shall include:
(i) An explanation of how to request that all such statements be
furnished by electronic delivery; and
(ii) Contact information for the plan sponsor, plan administrator,
or other designated representative of the plan, including a telephone
number.
(3) The plan may not charge any fee to a participant or beneficiary
for the delivery of any paper statements.
* * * * *
PART 2560--RULES AND REGULATIONS FOR ADMINISTRATION AND ENFORCEMENT
0
4. 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
5. Amend Sec. 2560.503-1 by:
0
a. Revising the second sentence of paragraph (g)(1); and
0
b. Revising the second sentence of paragraph (j).
The revisions read as follows:
Sec. 2560.503 Claims procedure.
* * * * *
(g) * * *
(1) * * * Any electronic notification shall comply with the
standards imposed by 29 CFR 2520.104b-1(c)(1)(i) and (iii), or with the
standards imposed by 29 CFR 2520.104b-31 (for pension benefit plans). *
* *
* * * * *
(j) * * * Any electronic notification shall comply with the
standards imposed by 29 CFR 2520.104b-1(c)(1)(i) and (iii), or with the
standards imposed by 29 CFR 2520.104b-31 (for pension benefit plans). *
* *
* * * * *
Signed at Washington, DC.
Daniel Aronowitz,
Assistant Secretary, Employee Benefits Security Administration,
Department of Labor.
[FR Doc. 2026-03723 Filed 2-24-26; 8:45 am]
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