Bill Would Shift Participant Disclosure Defaults
Bipartisan legislation introduced in the U.S. House of Representatives June 4 would allow pension plan participants to be automatically opted in to electronic delivery of documents. And a recent study suggests that the sponsors of the bill have good timing.
Rep. Jared Polis (D-Colo.) introduced the Receiving Electronic Statements to Improve Retiree Earnings (RETIRE) Act (H.R. 2656
). Reps. Phil Roe, (R-Tenn.), Ron Kind (D-Wisc.) and Mike Kelly (R-Penn.) are cosponsors of the bill. So far, no companion measure has been introduced in the Senate. H.R. 2656 is before two House committees: Education and the Workforce, and Ways and Means.
The measure concerns reports, statements, notices, notifications and other information used to provide information about plans to participants. It would amend ERISA and Section 414 of the Internal Revenue Code to allow automatic electronic provision of such materials.
If it is enacted, the act will apply to documents furnished regarding plan years beginning after Dec. 31, 2015.
The bill’s supporters note that it’s estimated (conservatively) that the costs of sending just one four-page notice to recipients is between $36 million and $60 million. They argue that the RETIRE Act would reduce mailing costs, protect the environment by eliminating thousands of pieces of paper mailed each day, and make information more accessible to recipients.
“It’s time to bring our retirement information delivery capabilities into the 21st century,” Polis said. “Our bill meets the needs of most Americans who prefer their inbox to their mailbox, while protecting those that continue to want paper documents. It saves money, protects the environment, and gives everyone greater access to the information they need to make decisions about retirement and savings.”
A recent study by Greenwald & Associates and its affiliate National Research, sponsored by the Spark Institute, says that a majority of Americans would be fine with getting retirement disclosures electronically. More than eight in ten (84%) agree that it is okay for the employer to provide retirement plan information electronically — if they can opt for paper at any time.
Just over half agree that they do not need to receive information by mail since they can always print electronic information out, and that it would be simpler to have retirement plan information online since account balance and performance information is already available that way. And close to six in ten agree that when information is sent electronically, it is easier to locate it (58%) and they are less likely to lose it (56%).