The Investment Company Institute has asked the Department of Labor’s Employee Benefits Security Administration to make electronic delivery the default method of communicating with 401(k) plan participants, unless a shareholder expressly asks to receive paper delivery.
Noting that technology has changed dramatically over the past decade, the ICI also says that electronic delivery is a more secure and less expensive method of communicating with shareholders.
Nine in 10 U.S. households have Internet access, and among households owning defined contribution plans, 96% have Internet access, the ICI said.
“The Department should establish general standards for electronic delivery, not prescriptive rules or safe harbors that soon will be outdated as technological innovations spread and access to the Internet becomes even more universal,” the ICI said. “It seems certain electronic communication will become more pervasive and user-friendly in all areas of life. For example, the development and increasing popularity of new mobile devices has brought electronic access to more Americans. Today, many Americans are performing tasks on their mobile phones that traditionally were done via land lines, computers or through in-person contact.”
Thus, the DOL must develop electronic delivery rules that are flexible and general enough to accommodate future innovations in technology, the ICI said.