How do you write a summary plan description?
Here are a few guidelines to follow when writing up a summary plan description:
- Understand the federal and state laws and their impacts on the employer/employee.
- Evaluate the plan’s financial impact.
- Use the correct legal language.
- Write the document in a way that is easy to understand, using everyday language.
What is a 401k summary plan description?
A summary plan description (SPD) is a comprehensive document given to retirement plan participants and beneficiaries that outlines the retirement plan’s provisions, benefits, and responsibilities under the plan, meant to be easily understood by plan participants.
What must be included in an ERISA plan document?
The document must name one or more fiduciaries that have the authority to control and manage the operation and administration of the plan. Allocation of responsibilities. The plan must include a procedure for allocating responsibilities for plan administration and operation. Benefit payment.
Who should receive the summary plan description?
A Summary Plan Description (SPD) is a document that employers must give free to employees who participate in Employee Retirement Income Security Act-covered retirement plans or health benefit plans. The SPD is a detailed guide to the benefits the program provides and how the plan works.
What is the difference between a plan document and summary plan description?
The summary plan description (SPD) is simply a summary of the plan document required to be written in such a way that the participants of the benefits plan can easily understand it. Unlike the plan document, the SPD is required to be distributed to plan participants.
How often does a summary plan description need to be updated?
Your Summary Plan Description Must be Updated Every Five Years.
Who must receive a summary plan description for 401k?
ERISA requires a Summary Plan Description (SPD) be distributed to each plan participant and to each beneficiary receiving benefits under the plan as follows: For existing plans, a new participant must receive a copy of the SPD within 90 days after becoming a participant, and a beneficiary must receive a copy within 90 …
What is a summary plan description spd?
Is the SPD the same as the plan document?
How long is an SPD good for?
Updated SPDs must be furnished every five years if changes were made to SPD information or if the plan was amended. Otherwise, SPDs must be furnished every 10 years. In October 2002, the DOL issued guidance around distribution of SPDs and similar materials.
Who is responsible for SPD?
The SPD must be provided within 90 days after an employee first becomes covered by the plan. Common distribution methods include hand delivery, mail and electronic delivery. The sponsor of an insured plan (not the issuer) is responsible for providing the SPD.
What is the difference between a plan document and a summary plan description?
What is a benefits plan summary?
Summary of Benefits & Coverage: Overview
The SBC is a snapshot of a health plan’s costs, benefits, covered health care services, and other features that are important to consumers.
Can summary plan descriptions be distributed electronically?
Employers may electronically distribute the SPD to employees with the ability to access the electronic media where they perform their job duties. In other words, they use a computer with internet access in their daily work.