The U.S. Department of Labor has published a final rule that would nix the default mailing of pension and 401(k) statements to eligible Americans in favor of electronic statements, which could spell trouble for seniors who aren’t regular internet users, according to a report from AARP.
Individuals who prefer to receive paper copies of these important financial statements will need to notify their employers or retirement plan administrators before July 27 or else they will be automatically enrolled in electronic delivery – meaning email, text and online portals will be the ways they can access documents and information.
“This rule is an outstanding example of how commonsense deregulatory efforts can save billions of dollars,” U.S. Secretary of Labor Eugene Scalia said in a news release when the rule was announced. “The rule will rely on widely available technology to keep workers and retirees informed about their plans, while still preserving the option to receive retirement information by mail.”
He added that this update in the delivery of retirement plan information options is one way the federal government is “reinvigorating the American economy” and “eliminating unnecessary burdens for employers that sponsor retirement plans.”
Moreover, cutting out paper statements would save an estimated $3.2 billion in the next decade, which can be used for retirement plans instead, the Department of Labor said in its release.
Despite the economic benefits of this rule, the AARP argues that seniors are at risk of not receiving their quarterly benefits statements, plan summaries and changes in a feasible way as the Employee Retirement Income Security Act of 1974 originally intended.
According to the nonprofit group, less than 75 percent of the nation’s retirees age 65 and older use the internet and only 59 percent have broadband access at home. It added that retirees in rural areas use the internet at an even lower rate.
FOX Business reached out to the Department of Labor’s Employee Benefits Security Administration about the electronic delivery rule but did not immediately hear back at the time of publication.
However, under the rule, retirement statements will be posted online for a year and will be available for download or print.
Employers and retirement plan administrators also have to notify eligible individuals of the default switch to electronic delivery in a paper letter first.
To opt-out of electronic delivery and continue receiving retirement statements via mail, eligible individuals can call the Department of Labor’s toll-free line 1-866-444-3272 and speak with a benefits adviser who will update enrolled preferences.
Alternatively, an employer or retirement plan administrator may need to be called or notified in writing to update the preferred delivery status.