A summary plan description (SPD) is a document that gives employees the key details about their employer-sponsored benefit plans. It covers the plan’s features, who’s eligible, benefits, and what participants need to know under the Employee Retirement Income Security Act (ERISA). The goal? To make sure employees understand their benefits and know what to do if issues come up.
Who gets a summary plan description?
Employers have to give SPDs to everyone enrolled in a benefit plan. That includes employees, retirees, and sometimes even beneficiaries—like spouses or dependents—if they’re eligible for benefits. The idea is simple: everyone relying on the plan should know what they’re entitled to and how it works.
Who has to provide the summary plan description?
If a company offers an ERISA-covered benefit plan, the employer or plan administrator has to provide the SPD. This applies to private-sector businesses offering health insurance, retirement plans (like 401(k)s), and other employee benefits. But not every employer falls under ERISA—government and church-sponsored plans are usually exempt. Employers also have to distribute the SPD on time, usually within 90 days of an employee joining the plan.
What should a summary plan description include?
An SPD needs to cover the basics so participants understand their rights and responsibilities. Here’s what should be in it:
- Plan name and type: The official name and whether it’s a health, retirement, or other benefit plan.
- Plan sponsor and administrator: The employer or organization managing the plan.
- Eligibility requirements: Who qualifies—employees, dependents, retirees.
- Description of benefits: What’s covered, like health insurance, retirement contributions, or disability benefits.
- Funding and contributions: Who’s paying—employer, employee, or both.
- Claims and appeals process: How to file a claim and what to do if it’s denied.
- Rights under ERISA: What participants can request and how they can appeal decisions.
- Amendment and termination policies: When and how the plan can change or end.
- Contact information: How to reach the plan administrator with questions.
This info makes sure employees have a clear, complete picture of their benefits.
When should an SPD be updated?
A summary plan description needs updates whenever there are major changes to the plan. If there are changes to benefits, costs, or eligibility, employers have to send out a Summary of Material Modifications (SMM) within 210 days after the change takes effect. Otherwise, SPDs should be updated at least every five years if changes happen, or every ten years if the plan stays the same. Keeping employees in the loop helps them make better decisions about their benefits.