Certified Plan Sponsor Professional (CPSP) Practice Exam

Do the IRS and DOL have the same rules regarding electronic delivery of notices to plan participants?

1. True

2. False

3. Only for certain notices

4. Depends on the plan type

The correct answer is: False

The correct response is that the IRS and DOL do not have the same rules regarding electronic delivery of notices to plan participants. Each agency has established its own regulations and guidelines governing electronic communications, and these can differ significantly. For instance, the Department of Labor (DOL) has specific rules regarding the use of electronic delivery that often require participants to consent to receive electronic documents and provide them with a notice of their rights. This includes stipulations on what notices can be sent electronically and the obligations of the plan sponsor or administrator when using electronic methods. On the other hand, the Internal Revenue Service (IRS) has its own set of rules that may allow for electronic delivery under different circumstances or with different requirements. The IRS guidelines might provide more leeway in certain cases, especially with respect to IRS notices that may not require the same level of consent as mandated by the DOL. Understanding these varied requirements is crucial for plan sponsors and administrators to ensure compliance with both agencies, as overlooking the differences can lead to improper delivery of important notices and potential penalties.