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Volume XI, Number 57

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Is it Time to Update Your Retirement Plan's Summary Plan Description?

Most employers know that they need to distribute a Summary Plan Description (or “SPD”) that describes the key features of their retirement plans to their employees when they first become eligible to participate in the Plan. But when do SPDs need to be updated?

The 210 Day Rule. ERISA (i.e., the federal Employee Retirement Income Security Act) says that if there is a material modification to the terms of the plan or other important information that is described in a Plan’s SPD, then each participant (and any beneficiaries who are receiving benefits under the Plan) should get a summary of the changes not later than 210 days after the end of the plan year in which the change is adopted. In lieu of sending out a separate Summary of Material Modifications (or “SMM”), many employers chose to update the plan’s SPD, so that all of the current information is in a single document. For calendar year plans that made changes in 2018, the 210 day deadline is July 29, 2019 – a date that is fast approaching!

  • 2018 changes to Disability Claims Procedures. In 2018 many employers needed to update the claims procedure language that was in their retirement plans to account for new requirements for processing disability benefit claims.  If the plan’s claims procedure language is found in the plan’s SPD, then the SPD will also need to be updated. This could be done with an SMM or with an updated SPD.

The Five Year Rule.  Even if no changes were made to your retirement plan in 2018, it may still be time to update your plan’s SPD. ERISA says that employers should furnish an updated SPD to each participant (and any beneficiaries who are receiving benefits under the Plan) every fifth year. (There is an exception for plans which have not been amended within the applicable five year period.)

Next Steps.  If your retirement plan’s SPD needs to be updated, and the plan document is a prototype or volume submitter plan document prepared and maintained by a vendor, you should confirm that the vendor has or will be preparing the necessary SMM or updated SPD and will be distributing the document to participants and beneficiaries. If that is not the case, the employer/plan sponsor is responsible for preparing and distributing SMMs and SPDs so participants and beneficiaries are timely informed of changes. 

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© 1998-2020 Wiggin and Dana LLPNational Law Review, Volume IX, Number 120
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Karen Clute Tax attorney New Haven Wiggin and Dana
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Karen is committed to helping clients navigate ever-changing tax and fiduciary rules. As a member of the firm's Private Client Services Department, Labor and Employment Department, and Philanthropy Practice Group, Karen has a wide-ranging practice grounded in a deep understanding of the intersections of personal-, community-, and employment-related tax, fiduciary, and financial concerns.

She advises individual clients about a broad range of estate planning issues, with an emphasis on estate and income tax planning. She works with executors and trustees on fiduciary matters and...

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Christian Chandler Employment lawyer Wiggin Dana
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Christian is a Partner in the firm’s Labor, Employment and Benefits Department in the Washington, DC office. He has over 20 years of experience in executive compensation and employee benefits matters. His significant experience in this area has made him a valued resource for a range of clients across industries, including public and private companies, senior executives, management teams and boards of directors.

Christian's practice spans the full spectrum of compensation and benefits issues, including the design, implementation, and regulatory compliance of employment agreements,...

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Mary Gambardella Litigation lawyer Wiggin Dana
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Mary brings decades of experience in helping clients comply with ever-changing labor laws and regulations, as well as in managing employment challenges such as sensitive terminations, sexual harassment, reductions in workforce, discrimination claims, and severance agreements. She is a proactive resource for clients seeking her counsel on a variety of human resource issues before they become a costly crisis, as well as a fierce advocate when crises arise.

Mary is Chair of the firm’s Labor, Employment and Benefits Department and regularly represents employers in...

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