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 “The Summary Plan Description.” This article describes the general content and distribution requirements of the summary plan description.


What is Covered in the Summary Plan Description?


The SPD is a detailed document that informs plan participants about how the plan operates and is managed. Among other things, the SPD must clearly identify in easily understood language the following items: 


  • A description or summary of the benefits
  • The plan name, sponsor, and administrator
  • Funding mechanisms
  • Participation and qualification guidelines
  • Calculation methods for service and benefits
  • Benefit vesting schedules
  • Benefit payment procedures and timing
  • Claims submission process
  • Claims appeal process
  • Address for service of legal process
  • Circumstances that may result in ineligibility or a denial of benefits
  • 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


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. There are no exemptions from the SPD requirement for small plans covering fewer than 100 participants.


How Often Must a Summary Plan Description be Updated?


If a plan is amended or modified within a five year period, a new SPD must be distributed to participants. If there is no change, the original SPD must be distributed to plan participants every ten years.


A “summary of material modifications” may also be used to notify plan participants of a significant plan change.


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, forfeitures, or exclusions
  • Failure to provide plan documents in a timely manner


Overall, ERISA provides clearly proscribed procedures that must be closely followed by plan sponsors and administrators. Questions about ERISA compliance should be directed to an attorney experienced in ERISA matters.


About the Author. Mark Johnson, Ph.D., J.D., is a highly experienced ERISA expert. As a former ERISA Plan Managing Director and plan fiduciary for a Fortune 500 company, Dr. Johnson has practical knowledge of plan documents as well as an in-depth understanding of ERISA obligations. He works as an expert consultant and witness on 401(k), ESOP and pension fiduciary liability; retiree medical benefit coverage; third party administrator disputes; individual benefit claims; pension benefits in bankruptcy; long term disability benefits; and cash conversion balances. He can be reached at 817-909-0778 or www.erisa-benefits.com. ERISA Benefits Consulting, Inc by Mark Johnson provides benefit consulting and advisory services and does not engage in the practice of law.



Contact ERISA Expert Dr. Mark Johnson

You can reach Dr. Johnson via email or by phone at 817-909-0778. He is available to confidentially discuss a benefits matter.


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