- June 1, 2026
Retirement plan sponsors have long struggled to satisfy the participant benefit statement requirements. Over the course of the last 20 plus years, many plan sponsors have attempted to satisfy the delivery of benefit statements electronically and, to do so, have had to navigate a tangled web of regulatory requirements. While complicated, electronic delivery remains desirable because it allows plan sponsors to avoid the effort and expense associated with issuing paper benefit statements. Notwithstanding these concerns, Congress decided to add another layer to these already complicated benefit statement delivery requirements.
More specifically, a somewhat overlooked section of SECURE 2.0 now requires defined contribution plan sponsors to provide at least one paper benefit statement every calendar year and defined benefit plan sponsors to provide at least one paper pension benefit statement every three calendar years (“Paper Requirement”). The Department of Labor (“DOL”) then issued proposed regulations on how to implement this congressional directive in late February of 2026 (“Prop Regs”).
Most plan sponsors rely upon one of two pre-existing DOL electronic disclosure safe harbors in order to facilitate their electronic delivery of participant benefit statements. Thus, the most important aspect of the Prop Regs is their explanation of how the Paper Requirement integrates with the pre-existing DOL electronic disclosure safe harbors. Therefore, in order to understand the Prop Regs impact on plan sponsors’ current electronic disclosure practices, it is necessary to understand the two electronic disclosure safe harbors and which one of the safe harbors a plan sponsor may be relying upon.
The older of the two electronic disclosure safe harbors was issued in 2002 and is often referred to as the “wired-at-work” rule (“2002 Safe Harbor”). In essence, this safe harbor allowed the electronic delivery of benefit statements to employees who used a computer at their desk for work purposes (hence, wired-at-work). Under the 2002 Safe Harbor, those employees who were not wired-at-work had to provide affirmative consent in order to be allowed to receive statements electronically.
With respect to plan sponsors relying upon the 2002 Safe Harbor, the Prop Regs require the provision of a one-time paper notice to employees who first become eligible for the plan at issue on or after January 1, 2026. Such notice must inform them of their right to opt out of electronic delivery and receive all mandatory ERISA disclosures (such as SPDs, SARs and benefit statements) on paper. This requirement applies only to newly eligible individuals and is not retroactive. Obviously, this new opt-out notice would be unnecessary if the plan sponsor intends to periodically mail a paper statement to employees as set forth under the Paper Requirement.
While the impact of the Paper Requirement on those following the 2002 Safe Harbor may not seem overly burdensome, it is a trap for the unwary. This is because the 2002 Safe Harbor does not otherwise require plan sponsors to give employees who used a computer at their desk for work purposes the option to opt out of electronic disclosure. Consequently, plan administrators will now need to take steps to implement this new opt out feature.
The second pre-existing DOL electronic disclosure safe harbor was proposed in 2020. Under this safe harbor, plan sponsors must provide a single initial paper notification advising about electronic delivery but, after that, could essentially default employees into electronic delivery unless an individual affirmatively opts out (“2020 Safe Harbor”). For plan sponsors relying on the 2020 Safe Harbor, the Prop Regs require that all participants receive a paper benefit statement as obligated under the Paper Requirement unless the individual affirmatively elects electronic delivery. Since the 2020 Safe Harbor did not previously include an affirmative election requirement, plan sponsors that want to avoid the Paper Requirement will need to determine the best way to solicit participant elections for electronic delivery. In addition, the Prop Regs require that benefit statements: 1) describe how to request electronic delivery; and 2) include contact information for the plan sponsor. Finally, it is prohibited for plan sponsors to charge fees to deliver paper benefit statements.
The new Paper Requirement is effective for plan years beginning on or after January 1, 2026. Consequently, satisfaction of these new rules are already required. Fortunately, presumably due to the late release of the Prop Regs, the DOL announced a temporary enforcement policy on May 12, 2026 in connection with these rules. Within that policy, the DOL stated it will not take enforcement action against plan sponsors that comply in good faith with a reasonable interpretation of the Prop Regs. Even so, plan sponsors should immediately determine which, if either, of the electronic disclosure safe harbors they currently rely upon and focus on implementing the operational changes necessary to be compliant with the Prop Regs and the Paper Requirement for current and future plan years.
We hope that this article helped you to better understand this topic and encourages plan sponsors to comply with these rules. However, please be advised that this article is not intended to serve as financial, tax or legal advice so it should not be construed as such. If you have questions about this topic, we strongly urge you to further discuss it with a qualified retirement plan professional. For more information about this topic, please contact our marketing department at 484-483-1044 or your administrator at Legacy.