Former EE requesting SPD from 23 years ago

[Brenda Wren]

My new client received a certified letter from a former employee requesting a copy of the SPD from the years in which she was employed (not necessarily a participant), 1997-2003.  Since I was not the TPA I don't have the SPD and my client doesn't think he has it either.  She was paid a benefit of about $50K in 2005 and apparently is not disputing that.  Is my client obligated to provide the old SPD from 23 years ago to the former participant?

[Peter Gulia]

That a plan’s administrator received a certified letter suggests it might be wise to lawyer-up.

Even if ERISA § 104(b)(4) alone might not require furnishing an SPD earlier than “the latest updated summary[] plan description” and SMM, a fiduciary might want its lawyer’s advice about whether duties of loyalty and communication call the fiduciary to furnish an older SPD (if the administrator still has that document), and about whether it’s wise or unwise to furnish it.

This is not advice to anyone.

[Artie M]

ERISA §101 Duty of disclosure and reporting states: 

(a)          Summary plan description and information to be furnished to participants and beneficiaries.

The administrator of each employee benefit plan shall cause to be furnished in accordance with section 104(b) [29 USC §1024(b) ] to each participant covered under the plan and to each beneficiary who is receiving benefits under the plan

Section 3(7) of ERISA, "participant"  means “any employee or former employee of an employer, …., who is or may become eligible to receive a benefit … or whose beneficiaries may be eligible to receive any such benefit”

ERISA Reg.  2510.3-3(d) provides:

(1)(ii)    An individual becomes a participant covered under an employee pension plan--

(A)          In the case of a plan which provides for employee contributions or defines participation to include employees who have not yet retired, on the earlier of--

(1) The date on which the individual makes a contribution, whether voluntary or mandatory, or

(2) The date designated by the plan as the date on which the individual has satisfied the plan's age and service requirements for participation.

My understanding of these rules are that once an employee contributes money to the plan they are a participant.  Once their funds are distributed from the plan, then they are no longer participants (assuming they are not still eligible to contribute to the plan) and they would not have any beneficiaries eligible for a benefit under the plan.

Here, you state they are a “former” employee who has taken a full distribution.  Presumably that means they are no longer eligible to contribute to the plan.  At the point they take the distribution (and are not eligible) they are no longer required to receive an SPD. 

However, to the extent they can still make a viable claim for benefits under the plan, it seems an SPD should be provided to a former participant as an SPD almost by definition is a document that would be relevant to their claim.  Assuming the applicable plan does not have a statute of limitations provision, I have no knowledge of a state that would provide a statute of limitations that would permit a claim for benefits 20 years after the benefit distribution has been made… but I guess there could be one....

That said, like @Peter Gulia states… you should likely lawyer up

[Brenda Wren]

Thanks for the comments.  It appears that the letter may have been prompted by her application for SS benefits as she states "as recommended by the SSA" in her letter.  I am unaware of any such comment in the SSA letters I've seen.  She further states that the US DOL EBSA has requested that she obtain the SPD.  This is ridiculous.

[Artie M]

Not entirely.  I have seen that ... see below from DOL website... this is just part of the notice.  Based on her response, she could simply be looking for "lost" retirement benefits.

 

[Francis]

The issue of former cashed-out participants thinking they have money in a plan is almost always prompted by the DOL trying to be a hero. We haven't yet had money laying around for one of these former employees. Even so, it's a good reminder to keep a distribution paper trail. In the above case, I suspect the former employee will go away she's reminded of her past distribution + I'd send the SPD if available.

[Brenda Wren]

Thanks again to responders!  We decided to provide the former participant with a letter stating that as a former participant with no benefits in the plan now, she is not entitled to receive an SPD at this time. We provided a copy of the last statement she received which reflected the amount she was paid along with the check number and date of her benefit check which was rolled over to an IRA.  We stated that we do not maintain historical copies of SPDs.  We think she met with SSA in-person as she was never reported on Form SSA which would explain why her request was stated the way it was. We do have copies of historical plan documents but did not provide that to her.

[fmsinc]

I think that the SPD might be available from the DoL EBSA Public Disclosure Room, at -
https://www.dol.gov/sites/dolgov/files/ebsa/about-ebsa/our-activities/resource-center/publications/how-to-obtain-employee-benefit-documents.pdf

and see attached.

This problem comes up frequently when the parties were divorced 20 or so years ago and realized that no QDRO was ever submitted, and where the in-hours Plan Administrator doesn't have a copy, let alone the TPA.   

David

 

how-to-obtain-employee-benefit-documents (1).pdf

[Peter Gulia]

Now that Brenda Wren resolved an inquiry, just an aside:

Even when ERISA’s title I required a plan’s administrator to file a summary plan description and a summary of material modifications with the Labor department, many administrators did not.

Congress ended those filing requirements, effective August 5, 1997.

Yet: “If a plan participant or beneficiary wishes a more recent copy of the SPD or SMM, the [U.S. Labor department] will request a copy from the plan administrator.”

That would return a request to the plan’s administrator, and it might no longer have (or might never have had) a requested summary plan description.