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One of the most important documents participants are entitled to receive automatically is a summary of the benefit plan, called the summary plan description (SPD). The Employee Retirement Income Security Act (ERISA) requires plan administrators to give to participants and beneficiaries an SPD describing their rights, benefits, and responsibilities under the plan in understandable language. The SPD must be provided when an employee becomes a participant of an ERISA-covered retirement or health benefit plan, or when a beneficiary receives benefits under such a plan.
The plan administrator is legally obligated to provide the SPD to participants, free of charge. The SPD tells participants what the plan provides and how it operates, including information such as:
If a plan is changed, participants must be informed, either through a revised SPD, or in a separate document, called a summary of material modification (SMM), which also must be given to participants free of charge. The SMM must be written in a manner that the average participant can understand.
Updated SPDs must be provided every five years if changes are made to the SPD information or the plan is amended; otherwise, they must be provided every ten years. New employees must receive a copy of their plan sponsor’s latest SPD within 90 days after becoming covered by the plan. Plan sponsors are not required to file the SPD with the Department of Labor (DOL), although they are required to provide it to DOL upon request.
ERISA also requires that SPDs be updated periodically. Furthermore, ERISA requires disclosure of any material reduction in covered services or benefits to participants and beneficiaries generally within 60 days of the adoption of the change through either a revised SPD or an SMM. Material changes that do not result in a reduction in covered services or benefits must be disclosed through an SMM or a revised SPD not later than 210 days after the end of the plan year in which the change was adopted.
SPDs for health plans
Among other information, the SPD of health plans must describe the following:
The DOL website has more information on SPDs and their importance.
One of the most important documents participants are entitled to receive automatically is a summary of the benefit plan, called the summary plan description (SPD). The Employee Retirement Income Security Act (ERISA) requires plan administrators to give to participants and beneficiaries an SPD describing their rights, benefits, and responsibilities under the plan in understandable language. The SPD must be provided when an employee becomes a participant of an ERISA-covered retirement or health benefit plan, or when a beneficiary receives benefits under such a plan.
The plan administrator is legally obligated to provide the SPD to participants, free of charge. The SPD tells participants what the plan provides and how it operates, including information such as:
If a plan is changed, participants must be informed, either through a revised SPD, or in a separate document, called a summary of material modification (SMM), which also must be given to participants free of charge. The SMM must be written in a manner that the average participant can understand.
Updated SPDs must be provided every five years if changes are made to the SPD information or the plan is amended; otherwise, they must be provided every ten years. New employees must receive a copy of their plan sponsor’s latest SPD within 90 days after becoming covered by the plan. Plan sponsors are not required to file the SPD with the Department of Labor (DOL), although they are required to provide it to DOL upon request.
ERISA also requires that SPDs be updated periodically. Furthermore, ERISA requires disclosure of any material reduction in covered services or benefits to participants and beneficiaries generally within 60 days of the adoption of the change through either a revised SPD or an SMM. Material changes that do not result in a reduction in covered services or benefits must be disclosed through an SMM or a revised SPD not later than 210 days after the end of the plan year in which the change was adopted.
SPDs for health plans
Among other information, the SPD of health plans must describe the following:
The DOL website has more information on SPDs and their importance.