From an employee's point of view, the most important document relating to an employee benefit plan (and in many cases, the only plan document of which the employee is aware) is the Summary Plan Description ("SPD"). The SPD is the basic document informing employees of the terms of the plan under which they are covered. It gives them an understanding of how the plan works, what benefits it provides, and how to receive such benefits. To guard against misunderstandings associated with lack of such knowledge, the Employee Retirement Income Security Act ("ERISA") imposes upon employers the duty to provide each plan participant with a current SPD that addresses the participant's rights and obligations under the plan.
By reason of the importance of the SPD, the Department of Labor regulations expressly hold that an SPD must be restated and redistributed to plan participants no less frequently than every five years. The restated SPD must address amendments that have been made to the plan during the interim period, even if participants have been previously provided Summaries of Material Modifications advising of changes to the plan. The updated SPD must also include any changes to information required to be disclosed in the SPD. These other changes could include:
A change in a member of the Plan's Board of Trustees; or
New plan expenses charged to the accounts of participants (such as for loan applications or other purposes), which the Department of Labor now requires to be disclosed in an SPD.
Time passes quickly. Therefore, employers should review the date of the most recent SPD for each of its employee benefit plans to ascertain if it is time to prepare and distribute an updated version.