IRS Electronic Media Guidance

Electronic media guidance is the IRS’s equivalent to the DOL’s Electronic Disclosure Safe Harbor. You may use these methods to deliver most plan information required under the Internal Revenue Code, such as the 401(k) Safe Harbor and Auto Enrollment Notices. The DOL approved the use of the IRS Electronic Media Guidance for delivering quarterly benefit statement information and notices of investment of the participant account balances in a qualified default investment option (QDIA).

IRS Electronic Media Guidance provides two methods of electronic delivery. The General Method has system, consent and notice requirements substantially similar to those under the DOL’s Electronic Disclosure Safe Harbor.

The Alternative Method allows plan administrators to use any medium as long as the recipient has the “effective ability to access.” This method includes e-mail and websites. Under this method, the plan administrator must notify participants that they may request a free paper copy of the information. The plan administrator must also determine that a proposed electronic delivery method meets the “effective ability to access” test. The IRS has released limited guidance for making this determination.

Here are some considerations:

  • In general, a plan administrator must have evidence that the delivery medium will permit the participant to access the information. For example, it is not sufficient to send an e-mail to the participant’s last known e-mail address. It is also unclear whether a recipient can effectively access an electronic medium if s/he does not own a computer. However, the spread of smartphones and tablets may be greatly reducing this population.
  • Employees may have the effective ability to access information through a worksite computer kiosk, even if not at their desk.
  • Neither the IRS or DOL has commented on a scenario where the employer establishes an e-mail account for every employee solely for the purpose of providing ERISA information electronically.

The IRS Electronic Media Guidance is, generally, considered less restrictive that the DOL’s Electronic Disclosure Safe Harbor. Therefore, if the electronic delivery meets the conditions of the DOL’s Safe Harbor (the Wired at Work or Affirmative Consent methods) it will generally satisfy the IRS Electronic Media Guidance.

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