If you offer a benefits package to your employees, you’re no doubt familiar with ERISA – the Employee Retirement Income Security Act of 1974 – that sets minimum disclosure standards for retirement and health plans. But did you know that violations are common, and the Department of Labor continues to increase penalties for noncompliance?
Among the most common violations are those resulting from failing to report and disclose plan information. Here are five key components to comply.
- SPD: The Summary Plan Description (SPD), which informs participants and beneficiaries about their plan and how it operates, must be provided to participants within 90 days of becoming covered by the plan and to pension plan beneficiaries within 90 days of first receiving benefits. An updated SPD must be furnished every five years if there are changes to the SPD information or the plan is amended. Otherwise, it must be furnished every 10 years.
- SMM: If there is a material modification to the plan, a Summary of Material Modification must be distributed to participants and pension plan beneficiaries receiving benefits no later than 210 days after the end of the plan year in which the change is adopted.
- SAR: The Summary Annual Report, which is a narrative of the Form 5500, must be provided to participants and pension plan beneficiaries receiving benefits within nine months after the end of the plan year or two months after the due date for filing Form 5500.
- Notice of Benefit Determination: Adverse benefit determinations must include required disclosures and be provided to claimants. The timing requirements vary depending on the type of plan and benefit claim involved.
- Plan Documents: Certain documents must be provided no later than 30 days after written request to participants and beneficiaries, including the latest updated SPD, Form 5500, trust agreement and other instruments under which the plan is established or operated.
For more information about these requirements, check out our Reporting and Disclosure Guide. Additional rules may apply to your organization. To learn how Complete Payroll Solutions can help you stay in compliance as your benefits administrator, contact us at 877.253.9020.