CFA joined with 18 other consumer and labor organizations in urging the Department of Labor to rescind a Trump-era rule that “makes it much harder for ordinary Americans to get the information needed to plan for retirement and enforce their rights.” The groups objected to the rule’s “notice and access” approach to disclosures sent by retirement plans to workers and retirees regarding such critically important topics as the rules by which the plan operates and the worker earns benefits, disclosures on participation and the amount of benefits earned, and disclosures that enable plan participants to ensure the plan is being operated to benefit them rather than the employer or the recordkeeper.
“The main issue at stake here is opt-in vs. opt-out – what default works best to protect workers and retirees,” the groups wrote. “The notice-and-access rule adopted by DOL last summer abolishes the actual receipt standard, and replaces it with a rule structured to minimize the chances that workers and retirees will actually receive important disclosures. Under the new rule’s default, the plan’s obligations to furnish disclosures begins and ends with sending an email or text message to a consumer letting them know that a disclosure is available on a website. The entire onus of noticing the electronic alert, logging in and finding the document on the website, and printing it out for future documentation is shifted from the plan to the worker/retiree.
“Notice-and-access goes well beyond, and is far more anti-consumer than, simple electronic delivery of a document like receiving a PDF attachment in an email,” the letter continues. “Contrary to the body of research by behavioral economists to make defaults work to promote desired goals, the rule uses the force of inertia against the retirement security interests of consumers – “automatically enrolling” them in a disclosure regime that will discourage them from receiving, reading or preserving the documents.”
They called on DOL to “make it a priority to propose and adopt major revisions to this rule as soon as possible.”