Believe it or not, it may be time to distribute a new Summary Plan Description (SPD) to include all changes made since the last issuance or a Summary of Material Modifications (SMM) for any amendments adopted during the 2018 plan year.

The Rules:  The Department of Labor (DOL) regulations and Employee Retirement Income Security Act (ERISA) require qualified retirement plans distribute an updated SPD to participants and beneficiaries within 210 days following the end of the 5th plan year in which the plan issues the last updated SPD.  An exception applies if a plan has had no amendments in the prior five years.  But really, who among us has not had amendments in the last five years where we saw natural disasters, a fiduciary rule roller coaster, the Tax Cuts and Jobs Act, the Bipartisan Budget Act, new disability claims procedures, etc.  If you have not amended your plan in the last 5 years, you may qualify for a longer period before you must distribute an updated SPD.  The alternative to sending a new SPD for every amendment is the SMM, containing only the information changed by a material amendment (material being based on facts and circumstances).  Plans must distribute SMMs within 210 days of the end of the plan year which includes the change.  Examples of a material change can include

  • name and address of the employer, plan sponsor, plan administrator, trustees;
  • collective bargaining agreements;
  • vesting;
  • eligibility for participation & plan benefits;
  • circumstances which may cause plan disqualification;
  • circumstances which may cause denial or loss of benefits or ineligibility;
  • plan year-end date; and
  • benefit claim procedures and remedies available for denied claims.

The Plans:  Qualified plans, including health and welfare plans, individually designed plans (IDPs), and pre-approved plans are subject to the SPD and SMM timing and distribution requirements.  If the issue date of your active SPD is before or within 2013, your plan may be due to distribute an updated SPD within 210 days of the plan year ending in 2018.  For calendar year plans, that date is Monday, July 29, 2019.  The updated SPD should contain all the information from any SMMs distributed over that period.

Penalties:  Failure to adhere to these requirements can trigger criminal penalties against the plan sponsor and personally against the plan fiduciaries up to $500,000 for the Plan Sponsor and $100,000 or up to 10 years imprisonment for the individual fiduciaries.

What to do:  If your plan is not among those due for the full SPD update distribution and your plan adopted any amendments during the plan year ending in 2018, the 210 day distribution requirement for the SMM will be here before you know it.  For calendar year plans, that date is Monday, July 29, 2019.

Contact your local Jackson Lewis office for assistance in determining your plan’s timetable for distribution of an SPD or SMM.  The “How” to distribute warrants its own article, but we can help with that too.