Notice extensions

The DOL has extended deadlines for certain notices, disclosures and other documents under Title I of ERISA.

The plan and its fiduciaries will not violate ERISA for failing to provide a covered document due during the period that began on March 1, 2020, when a National Emergency related to COVID-19 was declared, and ends on the 60^th day after the announcement of the end of the emergency, if they make a good-faith effort to provide the document as soon as possible under the circumstances.

A good-faith effort includes use of electronic alternative means of communicating with plan participants and beneficiaries who the plan fiduciary reasonably believes have effective access to electronic means of communication (including email, text messages and continuous access websites).

The Notice clearly covers annual funding notices for single employer and multiemployer DB plans, but appears not to cover multiemployer zone certifications and notices.

Loans and distributions

DOL loan relief for CARES Act loan provisions

The CARES Act changed the rules for participant loans under the IRC, but no parallel changes were made to the ERISA prohibited transaction exemption for plan loans. The Notice provides the DOL’s enforcement position with respect to the CARES Act changes, advising that it will not treat any person as having violated the provisions of Title I of ERISA, solely because a plan made a loan in compliance with or a person did not make a repayment in compliance with, the CARES Act.

The DOL will also treat a plan as operating in compliance with ERISA if the plan satisfies the CARES Act’s delayed amendment date, which is generally the end of the 2022 plan year.

Verification procedures

The Notice provides relief from plan verification requirements for plan loans and distributions due to COVID-19 if the plan administrator makes a good-faith effort under the circumstances first to comply with the requirements and then to correct documents and procedural defects as soon as administratively practicable.

No relief is provided for spousal consents or other requirements under the jurisdiction the IRS.

Participant contributions and forwarding loan repayments

The Notice provides relief from the requirement that employee contributions and loan repayments must be forwarded to the plan as soon as such amounts can reasonably be segregated, but in no event later than the 15^th business day of the month following the month in which the amounts were paid or withheld. The plan sponsor must comply as soon as administratively practicable under the circumstances.

Blackout notices

The Notice clarifies that because the coronavirus is an “event beyond the control of the plan,” the 30-day advance “blackout” notice to participants and beneficiaries whose investment rights will be temporarily suspended in participant-directed DC plans is not required.

Form 5500 Annual Report and Schedules

The Notice confirms that IRS guidance triggered by the National Emergency already extended the deadlines for the Form 5500 annual report and the related Schedules.

General guidance on ERISA fiduciary compliance

The DOL instructs plan fiduciaries to make reasonable accommodations to prevent participants from having benefit payments lost or delayed because the participant missed a deadline. It provides assurance to fiduciaries that its enforcement approach during this period will focus on compliance assistance.

Additional guidance

The DOL also issued a joint notice with Treasury and the IRS that mainly addresses health issues. That guidance also includes claims procedures relief that affects some retirement plans. (For a summary of that guidance, refer to our compliance news, Health and Disability Plan Deadlines Extended.)

The DOL also issued COVID-19 Answers to Frequently Asked Questions (FAQs) on retirement and health benefit issues, which is directed to participants and beneficiaries.

The information on this webpage is preliminary and subject to revision after guidance is issued. On all issues involving the interpretation or application of laws and regulations, plan sponsors should discuss the issues raised here with their legal, tax and other advisors before determining how they apply to their specific situation.