December 2020

1st: Participant Notices – Annual notices due for safe harbor elections, Qualified Default Investment Alternatives (QDIA), and Automatic Contribution Arrangements (EACA or QACA).

31st: ADP/ACP Corrections – Deadline for a plan to make ADP/ACP corrective distributions and/or to deposit qualified nonelective contributions (QNEC) for the previous plan year with a 10% excise tax.

31st: Discretionary Amendments – Deadline to adopt discretionary amendments to the plan, subject to certain exceptions (e.g., anti-cutbacks).

January 2021

1st: Defined Benefit Funding – Deadline to deposit the minimum required contribution for the 2020 plan year. Note that this extended deadline was established under the CARES Act for the 2020 plan year.

31st: IRS Form 945 – Deadline to file IRS Form 945 to report income tax withheld from qualified plan distributions made during the prior plan year. The deadline may be extended to February 10th if taxes were deposited on time during the prior plan year.

31st: IRS Form 1099-R – Deadline to distribute Form 1099-R to participants and beneficiaries who received a distribution or a deemed distribution during the prior plan year.

31st: IRS Form W-2 – Deadline to distribute Form W-2, which must reflect aggregate defined contribution deferrals.

On May 21, 2020, the U.S. Department of Labor and the Employee Benefits Security Administration (EBSA) announced the publication of a final rule that will allow employers to communicate the required retirement plan disclosures and other plan information electronically. The rule finishes a 2018 DOL initiative aimed at reducing administrative burdens and costs associated with the delivery of retirement plan disclosures. EBSA projects that electronic delivery could save retirement plan sponsors an estimated $3.2 billion over the next 10 years by eliminating significant materials, printing, and mailing costs associated with furnishing printed disclosures. As businesses face economic and logistical challenges due to the COVID-19 National Emergency, the rule brings much needed relief to plan sponsors and service providers while making disclosures more readily accessible and useful for America’s workers.

The final rule, which was effective July 26, 2020, establishes a voluntary safe harbor for retirement plan administrators who elect to use electronic media to furnish retirement plan disclosures to “covered individuals.” For plan sponsors interested in taking advantage of the new safe harbor, there are three rules to which they must comply:

1. The safe harbor only applies to retirement plan disclosures and does not include any document that must be furnished only if it is requested.
2. Covered individuals must provide an electronic delivery address such as an email address or smartphone number. An employer assigned email address, such as a company email address, may be treated as provided by the individual if the email address has a separate employment related purpose.
3. The initial notification of electronic delivery must be on paper. For those plans that would like to rely on the new safe harbor, the plan administrator must distribute a paper notice to covered individuals advising them of the intended electronic delivery and providing an opportunity for the individual to opt out.

“EBSA projects that electronic delivery could save retirement plan sponsors an estimated $3.2 billion over the next 10 years” — Employee Benefits Security Administration, 2020

The rule allows two methods for delivering retirement plan disclosures electronically:

1. Website posting. Referred to as the Notice and Access model, administrators may post participant disclosures on a website if an appropriate Notice of Internet Availability (NOIA) is furnished to the electronic addresses of covered individuals. These documents must remain on a website until superseded by a subsequent version but never for less than one year. The NOIA must include a description of the covered document(s), the electronic address (or hyperlink to the address) where the individual can access the document, and a required statement that advises individuals of their right to opt out of electronic delivery and to receive free paper copies along with the administrator’s or a designated representative’s phone number. The NOIA must generally be provided each time a new covered document is available for review on the website. However, the final rule permits an annual NOIA to include information about multiple covered documents instead of requiring that plan sponsors provide multiple NOIAs throughout the year.
2. Email delivery. Alternatively, administrators may send required disclosures directly to the email addresses of plan participants. Required documents must be sent to participants’ email addresses no later than the date by which the document must be furnished under ERISA.

Under the final rule, documents that may be provided electronically include:

• Annual disclosure notices such as safe harbor, Qualified Default Investment Alternative (QDIA), Fee Disclosures, and automatic enrollment.
• Summary Plan Descriptions (SPDs)
• Summaries of Material Modifications (SMMs)
• Summary Annual Reports (SARs)
• Notice of blackout period for participant investment direction
• Notices relating to Qualified Domestic Relations Orders (QDROs) Individual benefit statements required by the Pension Protection Act

IMPORTANT: The rules do not apply to any document that must be furnished only if it is requested.

The final rule allows the use of electronic media to furnish retirement plan disclosures to “covered individuals.” Covered individuals include plan participants (employees or former employees covered by the plan), beneficiaries (e.g., spouses and dependents covered by the plan), and other persons entitled to documents under Title I of ERISA who have provided the plan administrator or other appropriate designee with an email address or smartphone number. Electronic addresses previously provided to the plan administrator may be used without verifying the address if such reliance is in good faith and otherwise complies with the new safe harbor rule.

Covered individuals must be able to globally opt out of electronic delivery and receive paper copies at no cost to the individual. For administrative ease, the plan sponsor may continue to provide electronic copies in tandem with paper delivery. When a participant who has elected electronic delivery terminates employment, administrators must “take measures reasonably calculated to ensure the continued accuracy and availability” of electronic addresses used to deliver required documents, or take steps to obtain new, valid electronic addresses from plan participants.”

Additionally, the plan administrator must have a system for identifying bounce backs or delivery attempts to a covered individual that have been returned as “undeliverable.” If a bounce back is received, the plan administrator must promptly take reasonable steps to cure the problem by sending the NOIA or email to a secondary electronic address on file, obtaining a new valid and operable electronic address, or treating the covered individual as having globally opted out of electronic disclosures and distributing paper notices from that point forward.