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SPD for Welfare Benefit Plans

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Does anyone know if there are any penalties associated with not having a Summary Plan Description for a Welfare Benefits Plan?

EBIA ERISA manual says that an SPD is required for every single welfare plan, regardless of size. One of our clients had a DOL audit and the DOL made them go to a law firm and get a very expensive Welfare SPD (not the same as a wrap document so that you only have to file 1 5500).

I would like to tell my other clients about this, but they will ask what the penalties are for not having it, and I can't find that anywhere.


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There is a criminal sanction for a willful violation of ERISA's reporting and disclosure requirements. I think if a DOL auditor tells you to do it and you don't do it, that might suggest some willfulness.

On a more practical level, let me suggest: (a) If a participant or beneficiary requests an SPD, and you don't hand one over within 30 days, you are at risk for a civil penalty of up to $100 per day; and (b) if something goes wrong and a participant loses a benefit to which he/she was entitled because he/she did not follow through on the procedural requirements (e.g., the right to convert group life insurance to individual coverage; failure to comply with a medical plan's appeal procedures; etc.), the employer may be in a weak position where there has been no distribution of a compliant SPD.

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It is a requirement of ERISA and while i have seen plans with no Plan Document, I have never seen one with no SPD.

But what caught my attention was the apparent implying of a connection bbetween a "wrap document" and the requirement for filing of F5500 and also a connection between the SPD and the "wrap document". What are the connections?

George D. Burns

Cost Reduction Strategies

Burns and Associates, Inc

www.costreductionstrategies.com(under construction)

www.employeebenefitsstrategies.com(under construction)

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