PAC Director Jeanne Medeiros Cautions ERISA Panel On Electronic Delivery of Pension Documents

WASHINGTON – Routine documents and notifications, once dropped in the mail by companies and other organizations, are often sent off electronically or stored on a website now. The obvious reasons: convenience, simplicity and savings.

But is that a good way to handle the important documents related to retirees and their pension benefits?

Absolutely not, said Jeanne Medeiros, director of the Pension Action Center at the Gerontology Institute, part of UMass Boston’s McCormack Graduate School. In testimony before the ERISA Advisory Council, she said electronic delivery of those documents would create a host of practical problems for beneficiaries.

The current system of mailing printed copies of key documents, particularly Summary Plan Descriptions and individual benefit statements, is key for retirees to understand their pensions and make sure they receive what they are owed, said Medeiros. For starters, many of them don’t have computers to see electronic documents.

“It is quite clear that those who represent plan sponsors and financial service firms overwhelmingly express an interest in moving to electronic delivery of these required disclosures,” she said in her Aug. 23 testimony.  “These are documents intended to inform workers, retirees and their families of information which is vital to their financial security. Discussions of the ostensible ‘burden’ and ‘expense’ to plan sponsors should have little weight in this discussion.”

The advisory council has been conducting hearings this year on possible ways to reduce the burden and increase the effectiveness of mandated disclosures for retirement plans. The 15-member council will make recommendations to the U.S. Department of Labor.

Medeiros said the center believes Summary Plan Descriptions and individual benefit statements should only be delivered on paper by first-class mail unless pension participants affirmatively elect to receive them electronically. For all other disclosures, the center supported current Labor Department rules that permit electronic disclosure to employees who typically work with the employer’s computer network as part of their regular duties.

The Pension Action Center provides free counseling and advocacy for retirees pursing their pensions. The center has recovered over $57 million in benefits for retirees living in New England and Illinois.

Medeiros highlighted how electronic delivery of pension documents could complicate the circumstances of many clients the center serves. About 25 percent those people are considered to have “lost pensions.” They left jobs with deferred vested benefits payable years or even several decades in the future. Over time, companies were bought or sold, divisions were spun off, businesses declared bankruptcy or closed entirely.

Medeiros said, “If vital plan documents are only accessible through an employer-maintained website, what happens in these cases? Will plan documents be available? How? Who would be responsible for maintaining an archive of these documents?”

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