SPD's

[Guest HRD]

We have a client who wants to know if an a newsletter highlighting certain plan provisions that is given out at enrollment and the SPD can cross reference one another and together constitute a SPD. Anyone familiar with this?

[GMK]

Just my opinion, but put all the information in one document, the SPD.

A year down the road, when a widow or a QDRO lawyer or a participant asks for the SPD, it's easy to find the ONE document and provide it.

Highlighting in a newsletter is a great idea for informing new participants of plan features, but it may get to be awkward to maintain as a formal document of the plan.

[J Simmons]

I agree with GMK. Your SPD ought not refer to or in any way depend on language contained in the newsletter. Also, make sure that the newsletter highlight explains that it is not the SPD, but just a high-level overview and that the SPD ought to be reviewed for information about benefits before any decisions are made or actions taken. Also, your newsletter highlight needs to accurately reflect what it does mention about benefits, and not mislead as some employees will inevitably read just that newsletter. Therein lies the danger if that newsletter misstates anything or glosses over important but not intuitive details. If your newsletter (or employee handbook) merely mentions that employee benefits are explained in the SPD, then all you have to worry about updating when there is a change in benefits is the actual SPD and the governing plan document, if separate.

[Lori Friedman]

I agree 100% with GMK and JSimmons. The SPD is distributed in lieu of a copy of the entire Form 5500, with a format that's prescribed by Dept. of Labor regulations. A newsletter might be an excellent supplement to an SPD, but it doesn't take the place of the basic document (or any of its sections).

[Guest Sieve]

All that being said, there is no requirement that the SPD MUST be one document--an SMM, for example, would be considered part of the SPD, since it would not always be administratively feasible or cost-effective to revise the SPD with each plan amendment. Also, there may be multiple attachments to an SPD explaining differing eligibnility or benefit formulas or other provisions for employees of participating employers or certain divisions. Other than that, however, for all the reasons stated, the SPD otherwise ought not be multiple documents if it can be helped.

Lori -- I think you mean that the SAR (not the SPD) is a summary of the Form 5500.

[GBurns]

The SPD is distributed in lieu of a copy of the entire Plan Document.

The newsletter cannot and should not be part of, related to or an explanation of the SPD. J Simmons and GMK give good rationale.

[Lori Friedman]

Lori -- I think you mean that the SAR (not the SPD) is a summary of the Form 5500.

You're absolutely right. I read "SPD", and my mind jumped to "SAR." As the kids like to say, "Duh, Lori."