Overview: Summary Plan Descriptions (SPDs) provide plan participants with a detailed description of what benefits an employee benefit program provides and how it operates. Employers are required to provide an SPD for each plan covered by ERISA, written in language calculated to be easily understood by the average plan participant.
SPDs generally provide information on eligibility requirements, vesting requirements, how service and benefits are calculated, when benefits are paid, how to file a claim for benefits, how to appeal a denied claim and other administrative information about the plan.
The SPD should be delivered to participants within 90 days of becoming covered under the plan. In the case of newly established plans, the SPD must be distributed within 120 days after the plan is established. The SPD must be updated at least every 10 years (even if there are no changes); once every five years if changes have been made to the plan.
Trends: How SPDs are written and distributed are two areas that continue to be problematic for employers. It is important to keep in mind that the language in the SPD is binding, even if it includes a disclaimer stating that the plan document governs in the event of a conflict. Additionally, employers should be prepared to prove that the SPD was distributed in a manner "reasonably calculated to ensure receipt" using a method "likely to result in full distribution."
Tracy Morley, SPHR, Legal Editor
Updated to reflect increased ERISA civil penalties, effective August 1, 2016.
HR guidance on requirements for Summary Plan Descriptions - in particular, content and distribution requirements.