On July 27, a new anti-consumer Labor Department regulation went into effect. The new rule gives retirement plans the right to quit mailing workers and retirees important disclosures on paper and simply send a notice by text or email telling them that key pension information is available on a website. Then it is up to workers and retirees to hunt that information down.
The Pension Rights Center (pensionrights.org), which works to protect consumer rights, is strongly recommending that workers and retirees opt out of this disclosure system, which goes by the moniker “notice-and-access,” and insist that they continue to receive paper copies of key retirement documents, not just get a text or email indicating that the information is available on a website. Otherwise, people may miss getting important information they need to plan for retirement and prove their entitlement to benefits.
Under the new regulation, individuals will receive one initial notice on paper informing them they have a right to opt out of the notice-and-access delivery system and keep getting their documents in paper. After that, all future notices will arrive by email or text, including information about their right to choose to receive paper documents. Those who want paper will have to affirmatively ask for it. Equally important under the new regulation, this information will generally only be retained on the plan’s website for one year. Accordingly, if you don’t request the paper documentation, and save it, you could lose access to this valuable information, which you may need to protect your retirement plan rights decades from now. If you prefer everything to be electronic, then make sure you track down, print out and save all of the important documents about your plan rules and your benefits.
Karen Friedman, executive vice president of the Pension Rights Center, stated: “We are astonished that, in the midst of an unprecedented health crisis and economic collapse, the Labor Department would issue a regulation that will leave so many workers, retirees and their spouses in the dark about their retirement plans and benefits. At a time when people need information to protect themselves more than ever, this rule is a cruel game of hide-and-seek where workers have to run around and search for the information they will need to protect their future.”
The Pension Rights Center is participating in a call to action, a public education effort to encourage workers and retirees to “ask for paper” to protect themselves and their beneficiaries by insisting on a paper trail. Their website contains three fact sheets people will find helpful: a guide for consumers; a detailed summary of the new regulation; and a list of the “top 10 worst things” about the new regulation. The Pension Rights Center is also taking steps to educate members of Congress about the pitfalls of the new regulation, and is coordinating its activities with consumer and retiree organizations, unions, and business groups.
Until this new regulation, the Labor Department followed a common sense rule: plans sent out information on paper, through the mail, unless people regularly worked with computers, or asked to go “paperless.” Although retirement plans are still allowed to use this option, it is unlikely that most plans will continue this policy. That is why it is essential that workers and retirees insist on receiving this information in paper form on an ongoing basis.
If you encounter difficulties when you have request the paper option, you can submit a complaint to the Employee Benefits Security Administration of the Department of Labor at 1-866-444-3272, or send an email to email@example.com.
If you continue to have problems, contact the U.S. Administration for Community Living’s Pension and Information Counseling Projects.
Finally, ask your congressional representatives to overturn the notice-and-access rule and reinstate the prior Labor Department regulations with recurring automatic paper reporting unless a “paperless” option is requested by workers or retirees.
Bottom line: When you receive a notice from your retirement plan, don’t ignore it. Insist on receiving paper statements and documents on a continuing basis and keep those records in a safe place.
(Elliot Raphaelson welcomes your questions and comments at firstname.lastname@example.org.)
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