Plan Documents
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The Employee Retirement Income Security Act (ERISA) requires that every ERISA employee benefit plan be established and maintained pursuant to a written instrument. That instrument must give plan participants the most important facts they need to know about their health benefit plan including plan rules, financial information, and documentation on the operation and management of the plan. Some of these facts must be provided to participants regularly and automatically by the plan administrator. Others are available upon request, free-of-charge or for copying fees.
What Must Be in an ERISA Plan Document?
By statute, an ERISA plan must:
- Provide a procedure for establishing and carrying out a funding policy and method. The funding policy should set forth at least the source of funds for the payment of benefits, the methods of obtaining such funds and the plan’s short and long-run financial needs.
- Describe how responsibilities for the operation and administration of the plan are allocated. This is important if fiduciary responsibility under the plan is to be delegated to third parties.
- Provide a procedure for amending the plan and identifying the people with authority to amend the plan.
- Specify the basis on which payments are made to and from the plan.
- Specify how plan assets will be distributed upon plan termination.
- If an employer receives Protected Health Information (PHI), include provisions that permit the receipt, use and disclosure of PHI only in accordance with HIPAA privacy and security rules.
How Does a Plan Document Differ from a Summary Plan Description (SPD)?
ERISA provides for a plan document that must be provided to a participant only upon request and for a summary plan description that must be routinely distributed to all participants. Comparing the Geek Out! Summary Plan Description on SPDs with the list above, it is apparent that while there is some overlap between these requirements, they are not identical and that the list of required elements for the SPD is much longer.
There are two basic ways that plan sponsor handle these separate requirements. The first is simply to have two distinct documents. The other is to make the SPD a part of the Plan document (this is frequently called a “wrap” document.)
Employers with insured plans often do not have any documentation other than the insurance policy and certificates of coverage. While the insurance policy is likely to include many of the requirements of the SPD and plan document, it may not include them all.
For example, it may or not include some or all of the ERISA- required discourses about the plan sponsor and plan administrator, notice of ERISA rights, or information about amending or terminating a plan. This is not intended to be an all-inclusive list. Employers with insured plans should review with their counsel the need to have a separate plan document in addition to the insurance policy.
Copies for Examination
Copies of plan documents should be made available for examination by participants and beneficiaries in the principal office of the plan administrator.
- Documents should also be available in other places as may be necessary to make available all pertinent information to all participants and beneficiaries.
- These documents must be current, readily accessible, and clearly identified, and copies must be available in sufficient number to accommodate the expected volume of inquiries.
These documents include:
- The written Plan Document
- The latest Summary Plan Description (SPD)
- The latest Form 5500 (if applicable)
- Trust agreements (if applicable)
- Any other instruments or documents under which the plan is established or operated
Noncompliance
A plan administrator must provide a copy of the plan document within 30 days after a participant’s written request. Failure or refusal to do so may result in penalties of up to $159 per day (for 2020) from the date of such failure of refusal, but not to exceed $1,594 per request.
Additional Resources
How To Obtain Employee Benefit Plan Documents From DOL.
Material contained in ComplianceDashboard is a compilation of generally published information by the Department of Labor and other public agencies regulating employee benefit plans and employee benefit issues. It is not legal advice, and should not be construed as legal advice. If legal advice or other professional assistance is or may be required with regard to any issues referenced in this website, the services of a competent legal or tax professional should be immediately sought. The inclusion of links within the ComplianceDashboard website is for informational purposes only. ComplianceDashboard does not warrant the accuracy of information outside this website that is found as a result of following links contained herein, nor does the inclusion of those links herein constitute endorsement of the content of any other website. If you have questions regarding this disclaimer, please contact us at 877-328-7880.