Plan sponsors and other fiduciaries breathed a collective sigh of relief at the end of April when the Department of Labor extended, in EBSA Disaster Relief Notice 2020-01 (“Notice 2020-01”), certain deadlines and provided certain other relief for retirement plans. Unfortunately, Notice2020-01 did not identify the specific “notices or disclosures and other documents” (collectively “notices”) to which its deadline extensions applied. It says only that during the so-called “Outbreak Period” (defined in the Joint Notice as the period from March 1, 2020 until 60 days after the announcement of the end of the COVID-19 National Emergency) the extension applies to those notices “required by the provisions or Title I of ERISA over which the Department has interpretive and regulatory authority” (except for those notices covered by the Joint Notice).¹
Now that the dust has settled, the consensus seems to be that Notice 2020-21 does extend deadlines for the distribution of:
Summary Plan Descriptions
Summary Annual Reports
Summaries of Material Modifications
Participant Disclosures (ERISA §404(c))
Periodic pension benefit statements (ERISA §105)
Annual Funding Notices (ERISA §101(f))
But even as to these notices, the extension authority isn’t as good for plan fiduciaries as it looks; Notice 2020-01 did not provide blanket extensions. Rather, it conspicuously and carefully notes that deadline relief is only available “if the plan and responsible fiduciary act in good faith and furnish the notice, disclosure, or document as soon as administratively practicable under the circumstances ”So even as to the notices covered by Notice 2020-01, if a plan sponsor’s business and/or ability to fulfill the normal deadlines for dissemination of covered notices was/is not significantly impacted by the pandemic, it may well be that extending deadlines would not fulfill fiduciary duties. For fiduciaries whose ability to fulfill their duties has been impacted by the pandemic, they should document their decisions to substantiate that they acted in good faith and as promptly as possible.
Not all Deadlines Have Been Extended:
Form 5500: Notably, Notice 2020-01 did not further extend the due date for the 2019 Form 5500.²
Blackout notices:Nor, did Notice 2020-01 relax the 30-day advance notice requirement for blackout notices. It did provide minimal relief with respect to normal blackout notice obligations. Normally, 30 days advance written notice of a blackout must be given unless the inability to provide the notice is due to events beyond the reasonable control of the plan administrator and a fiduciary so determines that in in writing. Notice 2020-01 provides that this written determination is not necessary if the pandemic is the cause of the blackout because “by definition” it would be “beyond a plan administrator’s control.” However, again, if a sponsor’s ability to provide a blackout notice is not impacted by the pandemic, it would not be entitled to the normal relief or Notice 2020-01 relief.
Claims Procedures Determinations:Also, it is not clear whether Notice 2020-01 extended deadlines for plan fiduciaries to respond to claims and/or appeals of benefit claims. Although the Final Notice extended deadlines of participants/other claimants to submit claims, and benefit determinations arguably do constitute notices under Title 1 of ERISA, neither Notice 2020-01 nor the Final Rule expressly extend deadlines to adjudicate claims and appeals nor do they, as Notice 2020-01 does with respect to blackout notices, relax the existing written notice requirement that a plan administrator may, upon timely written notice, extend the time to process a claim/appeal upon written notice of expressly defined “special circumstances.”
Fiduciary Obligations Have Not Been Relaxed:
Plan fiduciaries should take note that neither Notice 2020-01, the Final Rule, nor any other COVID-19 relief gives plan fiduciaries the right to delay, and/or extend normal and regular processes and procedures with respect to other plan administration matters and/or to ignore duties and obligations set forth in governing Plan documents and under ERISA. Here is a non-exhaustive list of duties and obligation that Notice 2020-01 does not delay, extend or forgive:
Time to remit deferrals and loan repayments to plan custodian
Time to process distributions to participants
Time to perform valuations of Plan assets and/or to declare interim valuations not called for in the plan document
Time to determine participant eligibility to participate in a plan
Time to respond to participant questions
Time to respond to participant written requests for plan documents
Time to respond to requests for approval of QDRO’s
Payment of premiums to the PBGC
Searches for missing participants
Moreover, because some of the temporary relief provided to participants via the Final Rule, the Cares Act and FFCRA could evaporate at the end of the Outbreak Period and/or be revoked by amendment or otherwise, (See: COVID-19 and Employee Benefit Plans A Current Action List for Employers) plan fiduciaries may have a fiduciary duty to make sure that participants know of and understand the opportunities available to them. Specifically, fiduciaries should consider expediting dissemination of an updated summary plan description or summary of material modifications that explains the new relief and if that cannot be done quickly, fiduciaries should think about whether it would be more prudent to provide participants special and specific alerts and/or notice of relief available to them so that they have the realistic chance to take advantage of opportunities available to them. Fiduciaries should also consider how to best assist participants to secure available relief, whether that involves enhanced participant education, enhanced online or telephone help or otherwise. These are rapidly changing and uncertain times and fiduciaries must make sure that their efforts to serve the best interests of participants and beneficiary keep prudently and reasonably apace.
COVID Relief Take –Away:
Although Notice 2020-01 expressly acknowledges the immediate need for the relief it provides, it pointedly warns plan fiduciaries that at all times the “guiding principle” is “to act reasonably, prudently, and in the interest of the covered workers and their families who rely on ... benefit plans for their physical and economic well being.” It further instructs plan fiduciaries to “make reasonable accommodations to prevent loss of benefits or undue delay in benefits payments” and to “minimize the possibility of benefit losses because of “a failure to comply with pre established time frames.”
This means that neither Notice 2020-01nor any other DOL sanctioned delays or other regulatory relief outweighs the overarching principles of ERISA. Plan committees and other fiduciaries should do their best to maintain usual fiduciary best practices and where deviation from usual practice is found to be absolutely necessary because of the pandemic, such decisions should focus on the best interests of participants and beneficiaries and be well documented. For example, delaying a regularly scheduled committee meeting for a month in order to get everyone set up to meet on a collaboration platform seems intuitively reasonable and prudent; cancelling committee meetings altogether does not.
Finally, COVID-19 will not be the last emergency to affect plan fiduciaries, so now would be a good time for plan fiduciaries to review disaster preparedness and update or upgrade as is prudent. Steps that could be taken in this regard include reviewing plan technology in the event of a disaster, governing plan documents, trust or custodial agreements, committee charters, agreements with service providers and insurance policies.
¹ The DOL and the Treasury simultaneously issued a joint notice (the “Final Rule”) extending certain other deadlines for both welfare and retirement plan participants including deadlines with respect COBRA, HIPAA special enrollment, and claims filing procedure deadlines, as well as the deadline for the plan administrator to provide the COBRA election notice. (See: FAQ-COVID-19 Deadline Extensions. In addition, the DOL issued a set of FAQs entitled “COVID-19 FAQs for Participants and Beneficiaries” to help participants and beneficiaries impacted by COVID-19 understand their rights and responsibilities under ERISA.
² It did approve the IRS extension ( in IRS Notice 2020-23) for those Form 5500’s due between April 1, 2020 and July 14, 2020 to July 15, 2020 and applies it as well to Form M-1 filings for multiple employer welfare arrangements or MEWA’s “and certain entities claiming exception (ECEs).”