Certified Plan Sponsor Professional (CPSP) Practice Exam

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

1. Yes, they have the same rules

2. No, they do not have the same rules

3. They follow different rules depending on the state

4. Only the IRS has specific rules for electronic delivery

The correct answer is: No, they do not have the same rules

The correct answer highlights that the IRS and the Department of Labor (DOL) have different regulations regarding the electronic delivery of notices to plan participants. Each agency has established its own guidelines based on varying legislative intents and considerations for participant communications. The IRS has specific rules that pertain to retirement plans and the electronic issuance of tax-related documents, which reflect its focus on tax compliance and reporting requirements. The DOL, on the other hand, aligns its regulations more closely with the requirements of the Employee Retirement Income Security Act (ERISA), including participant disclosures and providing certain notices that ensure fiduciary responsibilities are upheld. Therefore, while both agencies acknowledge the growing trend of electronic communication, their respective requirements differ in terms of compliance standards, notice types, and participant protections. Recognizing this divergence is important for plan sponsors to ensure they meet legal obligations while effectively communicating with participants.