ERISA requires that each plan subject to ERISA provide a summary plan description (SPD) as part of their Plan Documents. The DOL provides the content requirements of the SPD. Over time other language has been added by practitioners and generally you will find the DOL required language as well as “good to have” language in most SPDs.
SPDs must be provided to new participants withing 90 days of becoming a participant. In the case of a new plan, SPDs must be provided within 120 days after the later of the date the plan becomes effective or adopted. SPDs must be furnished to the DOL within 30 days of written request. SPDs must be updated once every five years if there have been material changes and once every 10 years if there have been no material changes. Interim updates to SPDs are generally provided via a Summary of Material Modifications (SMM).
Failure to distribute an SPD could potentiall result in criminal charges under ERISA §501 (willfull violation of Title 1, part 1). In addition, there are penalties of up to $110 per day (up to $1,100) for failure to furnish information requested by the DOL.
We are available to assist you prepare or update your summary plan description and other benefit communication material.
Common questions regarding Summary Plan Description
I receive certificates/booklets from my insurance company, aren’t they considered an SPD?
While some insurance company certificates/booklets may be substantially compliant with the SPD content requirements, many are not.
You may want to use our Summary Plan Description checklist and compare it to your SPD. Of course, you should always consult counsel.