The U.S. Department of Labor proposed new rules on Tuesday requiring retirement plans to provide workers with periodic paper benefit statements, a shift that could add admin work and cost for any small business running a 401(k) or similar plan.
What the Rule Says
The proposal would require defined contribution plans (like 401(k)s) to send participants at least one paper benefit statement each calendar year, and defined benefit plans to provide a paper statement at least once every three years. The paper statement requirement applies to plan years beginning after December 31, 2025.
The DOL estimated that about 96.1% of participants currently receive electronic disclosures under existing rules, so this is a real change in how most plans operate today. A paper statement is generally not required if the “wired at work” or consent methods under the existing DOL electronic delivery safe harbor are met. In plain terms, if your employees access their statements through a work computer or have already given electronic consent under specific DOL rules, you may be able to continue with digital-only delivery.
To deliver statements electronically going forward, employers must first provide a one-time paper notice to participants who first become eligible to participate and to beneficiaries who first become eligible to receive benefits after December 31, 2025. That means every new hire enrolling in your plan will get a paper notice before anything goes digital.
Costs and Restrictions
The DOL estimates the combined impact of the statute and rule will cost roughly $49 million annually in compliance costs over the next decade. Plans would also be prohibited from charging participants for paper copies of benefit statements. That cost falls on employers and plan administrators.
What to Do Now
If you sponsor a retirement plan, talk to your recordkeeper or third-party administrator (TPA) about how they plan to handle this. Ask whether your plan currently qualifies under the “wired at work” or consent safe harbors, and what it would take to set up paper mailing for participants who haven’t opted in to electronic delivery. Review your employee address records now, since returned mail will create its own headaches.
Comments on the proposal are due within 60 days of its publication in the Federal Register, which is April 26. The DOL stated that it will not take enforcement action against plan administrators that comply in good faith with a reasonable interpretation of the proposed provisions while the rule is pending finalization. That buys some time, but don’t wait. The sooner you know where your plan stands, the easier the transition will be.
Full details are available at PLANSPONSOR and Ascensus.
