What Is An SPD, And Who Needs One?

Do You Have The Summary Plan Description You Need?

According to regulations set forth by the Employment Retirement Income Security Act (ERISA), nearly every employee benefit plan is required to have a summary plan description (SPD). The U.S. Department of Labor additionally dictates that each SPD should contain information that could be pertinent to its participants, including details about the plan administrator, the plan sponsor and more. 

The employer is required to provide a copy of the SPD to each individual who is part of that benefit plan. The SPD is designed to let people participating in an employee benefit plan know about the benefits that plan offers, as well as their rights in accordance with the plan. 

Does your business need to provide an SPD? The answer is yes, with these few exceptions:

• Church or governmental plans do not have to provide an SPD because they are exempt from Title I of ERISA.
• Cafeteria plans and employer-provided day care centers are also exempt from the need to offer an SPD.
• If you have an insured or unfunded welfare plan that provides benefits to an exclusive group of management and/or employees receiving high compensation, you are not required to have an SPD.

If you do not fall under one of these exemptions and you are the plan’s administrator, you need to provide each participant with an SPD. You are not required to furnish their beneficiaries with an SPD, though.

For more information about how SPD regulations affect your business, contact Sackett & Associates Insurance Services today. We serve Sonoma County and are here to ensure that your business aligns with existing and upcoming requirements while simultaneously helping you create the best employee benefit plans for your company and your team. Do not wait to get professional guidance; call us today!