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SPD Distribution Five-Year Rule


Guest Ann Caresani
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Guest Ann Caresani

If a plan is amended, SPDs incorporating the changes must be distributed essentially five years after the last SPD (even if a summary of material modifications is provided in the interim). Given the timing of TRA '86 amendments, this means that many retirement plans (including plans that did nothing more than add an entry date, for example) would be required to distribute new SPDs before GUST changes are made. This seems ridiculous. Is anyone aware of a DOL enforcement position on this issue? Or have you taken a position on this?

(ERISA Sec. 104(B) and DOL Reg. Sec. 2520.104b-2(B).)

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  • 14 years later...

Old post here, but I was curious about the same basic question. Does anyone do updated SPD's every 5 years? Most folks I know do them only when plan is restated. There's no civil penalty, as long as you provide an updated one when asked by participant or DOL, so it would only be possible criminal penalties - which seems ridiculous - I've never heard of them being imposed for a plan that timely provided an SPD and provides timely SMM's.

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Imagine a situation in which there have been a half-dozen SMMs since the last integrated SPD. How many tack-on SMMs should we require a participant to read to figure out which portion of the base SPD no longer describe the plan's provisions?

The rule requires a "freshener" SPD after a decade of no change. If there are changes, could five years be a reasonable interval for integrating the SMM changes into the base SPD?

Peter Gulia PC

Fiduciary Guidance Counsel

Philadelphia, Pennsylvania

215-732-1552

Peter@FiduciaryGuidanceCounsel.com

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Does anyone do updated SPD's every 5 years?

Yes. If the restatement and restated SPD will not make it within the 210 day deadline following the end of the fifth plan year. I know several other providers that do this, but also know many more that do not. IDP plans applying for D letters get restated every 5 years anyway, so a new SPD is likely generated from that every 5 years.

Too bad the 5-year SPD rule from the DOL is not lined up with the 6-year restatement period for pre-approved plans.

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Or too bad that the Internal Revenue Service did not design its internal administration of restatement cycles for pre-approved documents to follow an information cycle that has been in the statute since 1974.

Peter Gulia PC

Fiduciary Guidance Counsel

Philadelphia, Pennsylvania

215-732-1552

Peter@FiduciaryGuidanceCounsel.com

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