Most of employers and employees suffer a great deal when it comes to benefits such as pension plans and health. This challenge often occurs when one does not know his or her rights as an employer and, much worse, as an employee. The lucky lot that gets their (SPD) Summary Plan Description are basically participants in various retirement systems such as “public employee retirement systems (PERS).
As the saying goes, “When the sun goes down, do not cry, you may not be able to see the stars.” There is no need for you to be worried anymore since this article is going to drive you to understand the primary way of informing or rather, communicating the benefits of summary plan description (SPD).
Summary plan description (SPD), as defined by DOL, is a primary vehicle that offers information to participants and the one benefiting (beneficiaries) about their plan and how it works. Obligations, benefits and rights of a person are always under the SPD policy. The plan is written for a certain number of participants, and it is sufficiently and efficiently comprehensive to explain the benefits of the covered persons.
The plan administrator always provided the SPDs. Note that all the benefits such as pension plan, all health; medical, dental just to mention but a few, of every employee being the primary requirement in the scheme. Small programs under Form 5500 are an exemption, unlike SPD requirement where the small plan has no exemption. Title I of ERISA makes the church and governmental plans to be exempt because they differ with the Summary Plan Description requirements.
Under ERISA section 104(b) (4), even though the plan does not cover the participants and the beneficiaries, they have a right to receive a copy of the latest SPD after sending a request to the administrator in the form of writing. For every participant covered, it is his/her right to receive the SPD from the employer.
Anytime an employer wants to distribute the SPD, he should consider the following facts;
1. An employee should not pay a single penny or fee for the SPD
2. In case the employer decides to post the SPD on the company’s or organization’s website, he or she should communicate to his/her employees.
3. The employer should ensure that the employees have the ability to access the SPD in the electronic platform both efficiently as well as with ease.
There are several factors to include and consider in the Summary Plan Description. This is according to Federal Register 29 CFR 2520.102-3. Some of the key factors that must be considered include:
1. According to DOL regulations and ERISA section 102, it requires the following to appear on the SPD;
Plan’s name;
Address of the employer, especially in the case of one employer plan.
Employer identification number (EIN) that has been allocated by the IRS.
Plan sponsor needs to assign a policy number to the project.
The category of the welfare scheme.
The category of administration of the project.
ERISA section 3(16) the name, business address and telephone number.
If the plan has a trust, it should contain each trustee name, title and physical address of the company..
The name and address of the agent in charge of the legal process.
The agreement and the method of obtaining the copy of the agreement presented in a manner of a statement.
The expiry date of the plan and the basis the plan such as fiscal-year basis.
2. Terms and conditions for participation should also be neatly and clearly provided in a statement.
3. A detailed description of the plan.
4. A statement that clearly explains the rules and regulations as well as the penalties.
5. Detailed report on termination and amendment of the plan.
6. Detailed report on circumstances in the program that may lead to the recovery of benefits.
7. Confidentiality in contributions to the SPD plan.
8. A complete statement informing the rights of the beneficiaries and participants according to ERISA regulations.
9. A clear description to react to benefit claims and appealing benefit denials.
Every company, organization, institution, and firm needs the embracement of having an SPD, Summary Plan Description. It enhances communication and guarantees a top niche of well-prepared information to all the participants.
If you have questions or believe you need a summary plan description (SPD), it is never too late to make things right. Get yours today with Benefits Compliance Consultants LLC.
