Summary plan description (SPD)

What an SPD is

The SPD tells employees, in language they can understand, how the plan works. Department of Labor rules list what it must contain, including:

• The plan’s name, sponsor, plan administrator and trustee.

• Eligibility rules and when participation starts.

• How contributions and vesting work.

• When and how benefits are paid, and what could cause a loss of benefits.

• The claims and appeals procedure.

• A statement of participants’ rights under ERISA.

Timing

• New participants: within 90 days after they become covered.

• New plans: within 120 days after the plan becomes subject to ERISA.

• Changes: a summary of material modifications is due within 210 days after the end of the plan year in which the change was adopted.

• Updates: a fully updated SPD every five years if the plan was amended, and every ten years if it was not.

Why it matters to employers

The SPD is the document employees and courts rely on. If it is missing, out of date or inconsistent with the plan document, the plan administrator is exposed in a dispute. A participant who asks in writing for the SPD must receive it within 30 days, and a court can impose a daily penalty on an administrator who does not respond.

Electronic delivery is allowed if you follow the Department of Labor’s electronic disclosure rules.

Common mistakes

• Never giving the SPD to new hires because it “lives on the portal” without a proper notice.

• Amending the plan and not issuing a summary of material modifications.

• Using an SPD from a previous provider after changing plans.

• Assuming the provider delivers it. Confirm who sends it and keep proof.

• Letting the SPD and plan document say different things about eligibility or vesting.