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Guest Article

(From the November 15, 2010 issue of Deloitte's Washington Bulletin, a periodic update of legal and regulatory developments relating to Employee Benefits.)

Department of Labor Addresses Question About Furnishing SPDs to Participants

The Department of Labor (DOL) recently reaffirmed its long-standing position that ERISA plan administrators cannot satisfy their obligation to "furnish" summary plan descriptions (SPDs) simply by making them available to participants. The DOL's informal guidance was issued in response to a question posed by the American Bar Association's Joint Committee on Employee Benefits earlier this year.

In particular, the question was whether SPDs could be furnished by mailing a letter or postcard to all participants to let them know a new SPD is available and they can obtain a free copy by calling a telephone number and requesting one. The question stipulates that all participants have access to a telephone. Here is DOL's answer:

ERISA section 104(b)(1) provides that the plan administrator shall "furnish" an SPD automatically to each participant within 90 days of receiving benefits and, generally, every 5 years thereafter. With respect to the furnishing of SPDs, the general disclosure standards set forth in 29 C.F.R. § 2520.104b-1(b) require that the plan administrator use measures reasonably calculated to ensure actual receipt of the material by participants and beneficiaries. In addition, regulation section 2520.104b-1(b) requires that the SPD must be sent by a method or methods of delivery likely to result in full distribution.
The Department has long held the view that, where documents are required to be furnished to participants, it is not acceptable merely to make the documents available in a location frequented by participants. (See Preamble to regulation section 2520.104b-1(b)). Staff believes that the facts presented above are analogous to posting required disclosure materials in a location frequented by participants. Similar to posting an SPD, requiring participants to affirmatively seek out an SPD by placing a phone call is not a method likely to result in actual and full distribution of the SPD.

The DOL went on to explain that its rules relating to electronic distribution of SPDs and other plan materials do not apply in this situation because the SPD is not being distributed via electronic media.

The information in this Washington Bulletin is general in nature only and not intended to provide advice or guidance for specific situations.

If you have any questions or need additional information about articles appearing in this or previous versions of Washington Bulletin, please contact:

Robert Davis 202.879.3094, Elizabeth Drigotas 202.879.4985, Mary Jones 202.378.5067, Stephen LaGarde 202.879-5608, Bart Massey 202.220.2104, Tom Pevarnik 202.879.5314, Sandra Rolitsky 202.220.2025, Deborah Walker 202.879.4955.

BenefitsLink is an independent national employee benefits information provider, not formally affiliated with the firms and companies who kindly provide much of the content and advertisements published on this Web site, including the article shown above.