Paper disclosures are soooo 20th century, researchers say

In April, the Department of Labor announced it was seeking comments on how best to update its e-disclosure rules for benefit plans — a sorely needed facelift, since the rules hadn’t hit refresh since iTunes was created.

In a new white paper, two researchers say DOL should allow defined contribution plans to make electronic delivery the default mechanism for conveying disclosure notices and information to plan participants.

The paper’s authors offer sound reasoning for the switch: Greater use of electronic delivery would provide plan participants with timely and easy access to information in a more user-friendly format that allows a participant to obtain more information or take action in response to the information, according to the paper by independent experts.
E-delivery also will provide cost savings for plans and reduce the impact on the environment, saving up to $60.5 million per year in printing and mailing costs and 39 acres of forest.

In addition, a shift to e-delivery would meet statutory requirements and the goals of President Obama’s executive order on government regulation, the authors say.

“The arc of change is overwhelmingly in the direction of electronic rather than paper delivery,” says Peter P. Swire, Ohio State University law professor and co-author of the white paper. “With Internet access so widespread today, electronic disclosure is actually better in major respects than traditional paper delivery. There is a compelling case for the next DOL regulation to permit plans to choose a default rule of electronic delivery.”

Swire and co-author Kenesa Ahmad, a legal and policy associate with the Future of Privacy Forum, say the shift also will help improve participants’ experience. For example, they posit that electronic notices can provide “just-in-time” information to help participants at the point of making decisions about their plans, and allows participants to have access to information about their plans anytime, anywhere, including smartphones and other mobile devices.

All true, and all good. Except for one thing, I think: What about lower-income workers—who already are less likely to save for retirement and have access to the Internet, never mind have a smartphone? Wouldn’t such a move further alienate them from saving adequately and/or receiving valuable retirement planning messages?

What do you think? Share your thoughts in the comments.