The Employee Retirement Income Security Act (ERISA), the federal law that governs private pension, group life, and health plans, requires that plan participants get a document known as a summary plan description ("SPD"). While the SPD has to be drafted in accordance with two Division of Labor regulations, it does not must be called "The Summary Strategy Description." Get a lot more details about with swiftbond
What's Covered inside the Summary Strategy Description?
The SPD is a detailed document that informs program participants about how the strategy operates and is managed. Among other items, the SPD have to clearly identify in quickly understood language the following things:
A description or summary of your benefits
The plan name, sponsor, and administrator
Funding mechanisms
Participation and qualification guidelines
Calculation procedures for service and benefits
Advantage vesting schedules
Benefit payment procedures and timing
Claims submission process
Claims appeal process
Address for service of legal process
Circumstances that may well result in ineligibility or maybe a denial of benefits
A statement of participants' ERISA rights and other technical notices
Questions that a participant may well nonetheless have about the strategy right after reading the SPD can be answered by contacting the program administrator.
When Will have to a Summary Plan Description be Provided?
Every single strategy administrator must supply a copy with the SPD to participants inside the following circumstances:
When a new strategy requires effect
When an employee becomes eligible to take part in a plan
Upon written request of a plan participant or beneficiary
Are There Any Exceptions for the Summary Strategy Description?
Employer-provided daycare and welfare plans for management and highly compensated employees are exempt from the SPD requirement. You'll find no exemptions from the SPD requirement for compact plans covering fewer than one hundred participants.
How Typically Need to a Summary Program Description be Updated?
If a program is amended or modified inside a five year period, a brand new SPD should be distributed to participants. If there is certainly no alter, the original SPD has to be distributed to program participants each and every ten years.
A "summary of material modifications" may perhaps also be used to notify plan participants of a significant strategy alter.
What Are Popular SPD Errors that may Outcome in ERISA Litigation?
Administration errors or disputes that might result in ERISA litigation consist of but usually are not restricted to:
Failure to follow the procedures described within the SPD
Conflicts involving the SPD and any underlying program document which it describes or summarizes
Failure to clearly disclose circumstances that may outcome in benefits reduction, forfeitures, or exclusions
Failure to supply plan documents in a timely manner
Overall, ERISA supplies clearly proscribed procedures that must be closely followed by program sponsors and administrators. Inquiries about ERISA compliance really should be directed to an lawyer experienced in ERISA matters.