Businesses are always looking for way to go paperless. Banking, applying for jobs and even medical records are nearly all available in an electronic format in an effort to reduce paper waste and maintain efficiency.

However, when it comes to summary plan descriptions, or SPDs, regulations on formatting these documents have not been updated in more than 15 years. This means that while businesses can choose to distribute SPDs in an electronic format many still distribute them in paper form due to requirements an employee must meet in order to receive their SPDs electronically.

Bloomberg/file photo

For many advisers and brokers, the responsibility of ensuring these documents are distributed to their clients’ employees rests on their shoulders. In an effort to streamline SPDs into electronic formatting, Kim Buckey, VP of client services at DirectPath, has put together a team to work with the DOL to make electronic formatting a priority on the Trump administration’s agenda, not just for SPDs, but other forms of compliance communication as well.

“Traditionally, we have had a good working relationship with the agencies: DOL, IRS and CMS,” Buckey says. “We found them very receptive to input from employers and organizations such as ourselves who represent employers.”

Also see: Fiduciary survey reveals opportunities for plan sponsors and advisers.”

With key players in the new administration coming from the world of business rather than politics, Buckey and her team say the administration may be more inclined to help change the reporting process.

She adds that DirectPath has had successful conversations in the past with the DOL and is currently waiting to hear about when they can set a meeting with the Trump transition team to have similar conversations with them. “They’ve indicated that they are interested in talking with us about it. It’s just a matter of getting our schedules to align,” Buckey says.

How regulations stand currently
Under the DOL and IRS, certain information about employee benefit plans can be distributed electronically both within — and outside — the workplace. However, there are very specific rules about what types of information can be delivered electronically, who can receive such information and how such information can be delivered.

While there are many similarities across these rules, there are key differences depending on the audience and the material to be communicated.

“There is such a disconnect because the rules for the summaries of benefits and coverage that were put in place over Obamacare are much more liberal with respect to electronic distribution,” Buckey says. “The IRS’s rules around electronic distribution of benefits related forms on particularly the pension and savings plan side are more liberal than the DOL, so even within the government there isn’t consistency.”

Also see: The biggest Social Security change in 2017 that’s not being advertised.”

Setting guidelines
To give the DOL and IRS an idea of what DirectPath has in mind when making electronic distribution the standard for not just SPDs, but also SBCs, SARs, SMMs and so on; the company has put together a white paper explaining what should be done when handling electronically distributed documents.

The information ranges from who handles the documents, what types of documents can be electronically distributed, how procedures should be followed when handling electronic distribution of documents and what the standards should be for each department such as the DOL and IRS.

“In the past 15 years the number of people who have access to the Internet, who are routinely using smartphones, iPads or other forms of technology outside of the workplace” has grown rapidly, Buckey says. “Right now this seems like the perfect time to revisit this regulation.”

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