What relief was provided by the Department of Labor on April 29, 2020?
On April 29, the Department of Labor (DOL) published EBSA Disaster Relief Notice 2020-01 which provided certain relief to Notice and disclosure requirements under DOL’s jurisdiction, clarified a number of compliance requirements, and aligned Form 5500 deadline with the extension provided by the IRS in Notice 2020-23 on April. The notice also contained general guidelines for fulfillment of fiduciary duties and outlined a board enforcement approach to be used by the DOL in the period of COVID-19 National Emergency. The DOL indicated that they will continue to monitor the coronavirus-related events and may provide other relief as necessary.
Participant Notices and Disclosures DOL relaxed timeliness rules applicable to required notices or disclosures so that plan fiduciaries have additional time to meet their obligations under Title of I ERISA during the COVID-19 outbreak. The relief covers the documentation that must be provided between March 1, 2020 and 60 days after the end of the COVID-19 National Emergency is declared. This extension applies to the furnishing of notices, disclosures, and other documents required by provisions of Title I of ERISA over which the DOL has interpretive and regulatory authority, e.g. benefit statements, Summary Annual Reports, Participant Fee Disclosures, Summary Plan Descriptions, etc. (see DOL’s Reporting and Disclosure Guide for Employee Benefit Plans for more information).
To rely on this provision, plan fiduciaries ‘must act in good faith and furnish the notice, disclosure, or document as soon as administratively practicable under the circumstances.’
The DOL noted that ‘good faith acts’ include use of e-communications to share such notice and disclosure documents. The specific means of e-communications mentioned in the Notice are email, text messages, and continuous access websites. To use the e-communication approach, plan fiduciaries must reasonably believe that the parties for whom notices and disclosures are intended have effective access to email, text messages, and websites.
Plan Loans Generally, plans have procedural requirements to verify eligibility for certain withdrawals. The DOL will provide relief, if the failure is coronavirus-related, the plan sponsor makes a good-faith effort to comply with the requirements, and makes a reasonable attempt to correct any procedural deficiencies, such as assembling any missing documentation, as soon as administratively practicable.
Form 5500 Relief The DOL aligned itself with the relief provided by the Treasury Department and the IRS in Notice 2020-23. Form 5500 deadlines from April 1, 2020, to July 14, 2020, are extended to July 15, 2020. No additional relief was granted in this Notice. Thus, since most calendar year plans are due 7/31/2020, most clients will not get any additional time to file the Form 5500.
General Fiduciary Guidance The DOL reminded plan fiduciaries to abide by the guiding principle that requires them to act reasonably, prudently, and in the interest of the employees and their families. Plan fiduciaries should make reasonable accommodations to prevent the loss of benefits or undue delay in benefits payments and should attempt to minimize the possibility of individuals losing benefits because of a failure to comply with the usual pre-established timeframes.
In their enforcement efforts, the DOL promised to focus on compliance assistance, including grace periods and other relief when following the usual timeframes for participant requests and other related acts isn’t possible due to physical disruption to plan sponsors or plan service providers.
Cetera Retirement Plan Specialists is a third-party administrator and may not offer tax, legal or investment advice. Plan sponsors should consult their own tax, legal or investment professionals.