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ERISA Summary Plan Description Requirements

By Mark Johnson, Ph.D., J.D.

The Employee Retirement Income Security Act (ERISA), the federal law
that governs private pension, group life, and health plans, requires that
plan participants receive a document known as a summary plan
description (“SPD”). Although the SPD must be drafted in accordance
with two Department of Labor regulations, it does not have to be called
Mark Johnson, Ph.D., J.D.
“The Summary Plan Description.” This article describes the general
817-909-0778
content and distribution requirements of the summary plan description.
mark@erisa-benefits.com
What is Covered in the Summary Plan Description?
Consulting services in:
The SPD is a detailed document that informs plan participants about how
the plan operates and is managed. Among other things, the SPD must
• Fiduciary liability
clearly identify in easily understood language the following items:
• 401(k) and ESOPs
• Pension benefits  A description or summary of the benefits
• Bankruptcy  The plan name, sponsor, and administrator
• Cash balance conversions  Funding mechanisms
• Group life & health plans  Participation and qualification guidelines
• Health plan reimbursement  Calculation methods for service and benefits
• Long term disability benefits  Benefit vesting schedules
• Retiree medical plans  Benefit payment procedures and timing
• Severance benefits  Claims submission process
 Claims appeal process
• Survivor benefits
 Address for service of legal process
• Third party administrators
 Circumstances that may result in ineligibility or benefits denial
• VEBA plans  A statement of participants’ ERISA rights and other technical notices

Questions that a participant might still have about the plan after reading the SPD can be answered by
contacting the plan administrator.

When Must a Summary Plan Description be Provided?

Every plan administrator must provide a copy of the SPD to participants in the following circumstances:

 When a new plan takes effect
 When an employee becomes eligible to participate in a plan
 Upon written request of a plan participant or beneficiary

Inc.Are There Any Exceptions to the Summary Plan Description? Employer-provided daycare and welfare plans for management and highly compensated employees are exempt from the SPD requirement. long term disability benefits. by Mark Johnson provides benefit consulting and advisory services and does not engage in the practice of law. J. 2010 .D.erisa-benefits. pension benefits in bankruptcy. How Often Must a Summary Plan Description be Updated? If a plan is amended or modified within a five year period. forfeitures. ESOP and pension fiduciary liability. About the Author. October. is a highly experienced ERISA expert. A “summary of material modifications” may also be used to notify plan participants of a significant plan change. As a former ERISA Plan Managing Director and plan fiduciary for a Fortune 500 company..com. third party administrator disputes. ERISA Benefits Consulting. What Are Common SPD Errors that Can Result in ERISA Litigation? Administration errors or disputes that may result in ERISA litigation include but are not limited to:  Failure to follow the procedures described in the SPD  Conflicts between the SPD and any underlying plan document which it describes or summarizes  Failure to clearly disclose circumstances that may result in benefits reduction. the original SPD must be distributed to plan participants every ten years. ERISA provides clearly proscribed procedures that must be closely followed by plan sponsors and administrators. or exclusions  Failure to provide plan documents in a timely manner Overall. Johnson has practical knowledge of plan documents as well as an in-depth understanding of ERISA obligations. individual benefit claims. There are no exemptions from the SPD requirement for small plans covering fewer than 100 participants. Mark Johnson. Ph. a new SPD must be distributed to participants. and cash conversion balances. If there is no change.. He can be reached at 817-909-0778 or www.D. Dr. retiree medical benefit coverage. Questions about ERISA compliance should be directed to an attorney experienced in ERISA matters. He works as an expert consultant and witness on 401(k).