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austin3515

Public School / Non-ERISA Plan

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Our document software creates an SPD for delivery to participants.  I know it's not required but of course it is a good and thorough explanation of the plan so I would typically have clients distribute (whether exempt or not).  I have a new client where the provisions are quite complex and vary depending on which group of employees you are "disclosing" to, which makes production and distribution of the SPD's a bit more challenging.

So I know they are not required to use an SPD (they have informal informational sheets).  But are there benefits to distributing a complete SPD to all Participants which clients may wish to avail themselves of?  One thing that comes to mind is reducing the risk of an employee saying "Geeze if you had told me that.."

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Before answering your question, if a difficulty is about explaining provisions that apply differently to different groups, consider making two (or more) summaries.  Even for an ERISA-governed plan, the regulations expressly approve that method.  Each summary would describe the provisions that apply to a particular class of participants.

 

29 C.F.R. § 2520.102-4 https://www.ecfr.gov/cgi-bin/text-idx?SID=3a755c0fd8410a941af9b029f61c0e60&mc=true&node=se29.9.2520_1102_64&rgn=div8

 

There are potential benefits of good communication beyond doing the decent thing of furnishing information a participant needs to protect her rights and interests.  As you suggest, having furnished written information might set up a response to a “why didn’t anyone tell me” criticism.  Similarly, it might shorten a statute of limitations or other time limit on a participant’s (or beneficiary’s) lawsuit or claim.  Many court decisions treat a person furnished a disclosure document as having knowledge of the information one could learn by reading the document.  Knowledge sometimes invokes a shorter time limit.  For some kinds of claims, knowledge might defeat a claim entirely.

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1 minute ago, Fiduciary Guidance Counsel said:

Before answering your question, if a difficulty is about explaining provisions that apply differently to different groups, consider making two (or more) summaries.  Even for an ERISA-governed plan, the regulations expressly approve that method.  Each summary would describe the provisions that apply to a particular class of participants.

Tnhank you, thats definitely my plan, I was aware of that.

Thakns for your other insights as well, very helpful!!

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