Electronic recordkeeping of employee benefits plan information can aid plan administration efficiency and reduce costs for employers, but also poses increased difficulties and risks for plan members that the U.S. Labor Department must address, the Pension Rights Center will tell the ERISA Advisory Council during testimony the morning of September 20.
Pension Rights Center Acting Legal Director Norman P. Stein and Anna-Marie Tabor, a visiting law professor at the University of Massachusetts School of Law and the former director of the Pension Action Center located at the University of Massachusetts Boston, will be testifying on behalf of the PRC, a national nonprofit, nonpartisan consumer organization committed to protecting and promoting the retirement income security of workers, retirees, and their families.
Stein, in his written statement to the Council, which will report its findings and recommendations to the DOL, noted that “electronic recordkeeping in ERISA is not a niche subject, touching only on a few discreet technical issues. Indeed, electric recordkeeping has left its imprint on almost every corner of ERISA. And while it has made many of the quotidian aspects of ERISA plan administration quicker and less expensive, it has created new issues and sometimes compounded old unresolved ones. Many of these issues touch on the ability of participants and beneficiaries to demonstrate entitlement to benefits they have earned, often decades earlier.”
He warned that “electronic recordkeeping can make the transfer of records from one proprietary system to another more challenging than transferring paper documents. Thus, when change occurs—for example, when a plan replaces one recordkeeper with another, when a corporate reorganization or bankruptcy occurs, when a plan spinoff or consolidation occurs—ensuring that the records follow the plan and its affected participants presents unique challenges not generally encountered with paper records. And privacy concerns (an issue previously considered by the Advisory Council) are more profound” in that electronic records are hackable.
Tabor’s message to the Council is that lapses in record-keeping can lead participants to expend considerable time, energy and expense recreating missing and erroneous records and, in some cases, losing pension benefits they had earned over decades of work because of missing or incorrect records.
In his statement, Stein urged the Council to “keep in mind the fundamental purpose of ERISA and not elevate cost and efficiency over the ultimate security of earned benefits.”
Among Stein’s recommendations is that DOL:
Members of the public can register for the Council’s session on “Recordkeeping in the Electronic Age” in person or virtually on the Council’s website here. The meeting’s agenda can be found here. The session runs from 8:30AM to 4:30PM EDT.
For additional information, contact the Pension Rights Center at email@example.com.