This is what we have been waiting for. In our earlier post, we reported that the Internal Revenue Service (IRS) extended various deadlines for retirement plan filing and payment obligations. At the time of that publication, the Department of Labor (DOL) had not provided relief for ERISA filings.

On April 28, 2020, the DOL provided guidance issuing three publications that addressed the impact of COVID-19 on ERISA reporting and disclosures responsibilities. For now, we’ll focus on Disaster Relief Notice 2020-1 which provides relief on retirement plan deadlines Here is a summary:

General ERISA Fiduciary Guidance

The DOL notes that the guiding principle for plans must be to act reasonably, prudently, and in the interest of the covered workers and their families who rely on their health, retirement, and other employee benefit plans for their physical and economic wellbeing. Plan fiduciaries should make reasonable accommodations to prevent the loss of benefits or undue delay in benefits payments in such cases and should attempt to minimize the possibility of individuals losing benefits because of a failure to comply with pre-established timeframes.

The DOL also acknowledged that there may be instances when plans and service providers may be unable to achieve full and timely compliance with claims processing and other ERISA requirements. The DOL indicatd that their approach to enforcement will emphasize compliance assistance and include grace periods and other relief where appropriate, including when physical disruption to a plan or service provider’s principal place of business makes compliance with pre-established timeframes for certain claims’ decisions or disclosures impossible.

Filing and Disclosure Extensions

The Notice extends the time for plan fiduciaries to furnish benefit statements, annual pension plan funding notices, and other notices and disclosures required by ERISA to provide them due to the coronavirus “so long as they make a good faith effort to furnish the documents as soon as administratively practicable under the circumstances”.

The DOL indicates that good faith acts include the 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 documents and disclosures include:

  • Annual funding notices required by ERISA section 101(f).
  • Summary Annual Reports (SARs).
  • Summary Plan Descriptions (SPDs) and summaries of material modifications (SMMs).
  • QDRO notices.
  • Periodic pension benefit statements required by ERISA section 105.
  • General plan notices (such as plan fee disclosures).
  • Qualified Default Investment Alternative (QDIA) notices.
  • Notices of adverse benefit determinations and appeals.
  • Blackout notices.

Form 5500 Extensions

The Notice builds on earlier guidance the IRS issued in Notice 2020-23 in April extending the deadline until July 15, 2020, for Form 5500 filings that would otherwise be due on or after April 1 and before July 15, 2020. The extension automatically applies to these deadlines:

First, Form 5500 filings for plan years that ended in September, October, or November 2019. In other words, non-calendar year plans.

Second, Form 5500 deadlines that fall within the relief window due to a previously filed extension request on Form 5558.

Notably, the due date for 2019 Form 5500 filings for calendar year plans remains July 31, 2020, unless extended on Form 5558.

Loan Repayment and Deposit of Employee Contributions

The DOL pays special attention to the timely deposit of participant contributions and loan repayments. The Notice states that it will not treat a failure to follow procedural requirements if:

  • that failure is solely attributable to the COVID-19 outbreak;
  • the plan administrator makes a good-faith diligent effort under the circumstances to comply with those requirements; and
  • the plan administrator makes a reasonable attempt to correct any procedural deficiencies, such as assembling any missing documentation, as soon as administratively practicable.

Key Takeaway

Notice 2020-1 should be a reminder that ERISA reporting and disclosure requirements are also fiduciary obligations. As the Notice mentions, the DOL can consider the plan sponsor’s circumstances in the enforcement process. Processes, procedures, and internal controls matter.