SPD Requirement

Is it reasonable for an employer to provide an SPD during the enrollment process 10-30 days prior to meeting initial eligibility? Or should the SPD be provided only until after eligibility has been met?  

It seems very reasonable to provide with enrollment materials.

26 minutes ago, Lou S. said:

It seems very reasonable to provide with enrollment materials.

Would it satisfy the SPD notice requirements?

Is your concern that he wording on timing is within 90 days after becoming a participant and you don't think you can give it to before they are a participant?

Maybe an ERSIA lawyer could weigh in, but since the purpose of the SDP is to be a easily understood reading of the plan terms for the participant, I don't think either the IRS or DOL would have any problem giving the SPD at the same time you are giving the rest of the enrollment materials so the participant can make informed choices.

Why wouldn't you want the participant to know what they're in for ahead of time, unless you're worried about a one-time irrevocable waiver of plan participation prior to becoming eligible for any company plan?

On 12/6/2024 at 4:08 PM, Bri said:

Why wouldn't you want the participant to know what they're in for ahead of time, unless you're worried about a one-time irrevocable waiver of plan participation prior to becoming eligible for any company plan?

My concern was satisfying the SPD requirements. I think it makes more sense to hand out the SPD prior to their entry date. The SPD requirement doesn't seem rational to hand out material after the entry date. 

The regulations simply state:  "on or before the later of:  (1) The date which is 90 days after the employee becomes a participant . . . ."  I am not aware of any relevant guidance that states a "no earlier than" date.  The key phrase in the reg is "on or before".  So, any time earlier than the date the employee becomes a participant technically fits within the literal words of the regulations; however, there is probably a strong likelihood the DOL would consider providing an SPD a year prior to the date the employee becomes a participant as unreasonable. I could see a DOL agent arguing that the period for giving the SPD commences on the date the employee becomes a participant (key term here is "after") and ends on the 90th date after that.  However, I could see another DOL saying that a period of 30-60 days prior notice would not be unreasonable (see, e.g., the blackout notice rules).  As noted by someone above, prior notice and information should be helpful to a participant.  It seems like giving the SPD say within 30 days prior to becoming eligible should be useful and reasonable and shouldn't be challenged by the DOL ... especially, if you can show that it was actually given to the employee at that time, that the employee was informed of the importance of the SPD and that they become eligible to participate within 30 days.  If you give it early (i.e., 30 days prior to eligibility), when the employee actually becomes eligible my thoughts would be to have company send them a communication stating they were previously provided an SPD upon hire (i.e., within 30 days) and that if they need another one it can be accessed at intranet site address or call HR.  

Note... these are just my thoughts so DO NOT construe these ramblings as advice. 

Thanks!