Support and Technology To Help You Avoid Costly Penalties from Employment Retirement Income Security Act (ERISA)
What is ERISA law? The Employee Retirement Income Security Act (ERISA) is a federal law that protects the interests of employees and their beneficiaries specifically on retirement plans and welfare benefit plans. ERISA protects retirement savings from mismanagement and abuse, and ensures they act in the best interests of plan participants. It also requires transparency and accountability, ensuring that participants have access to information about their plans at any given time.
WHY CLARITY ERISA?
Clarity is here to do the heavy ERISA compliance lifting for you, helping to minimize risk with expert support, innovative software and a 24/7 compliance portal.
COST-SAVING COMPLIANCE
Our support and technology can help you stay ERISA compliant and avoid costly penalties, which might range from $110 to more than $2,194 for every day a single plan is in violation.
AUTOMATED DOCUMENTATION
We automate the creation of your wrap plan document and summary plan description (SPD) so you have a single, up-to-date source document for all benefit plans subject to Employee Retirement Income Security Act (ERISA).
CLOUD-BASED PLATFORM
Our innovative platform ensures ongoing ERISA compliance, provides real-time access for updates and audits and keeps your employees informed.
DEDICATED SUPPORT
Your expert Client Relationship Manager will provide dedicated, ongoing support to help you navigate ERISA, make changes to your documents and answer questions from auditors.
Ongoing Support:
CLARITY CAN HELP WITH ALL PHASES OF ERISA COMPLIANCE, INCLUDING:
- ERISA wrap plan document
- Ongoing ERISA administration
- Summary plan description explaining key terms and conditions to all participants
- Tax Form 5500 preparation for groups with 100+ employees
- Self-service online portal with 24/7 access to documentation
- Software automation of wrap documents
- Written plan document for each benefit plan offered
- Annual plan document updates for changes and new plans
- Automated reporting and employer notifications
- Audit support
ERISA Delivery Requirements for Summary Plan Documents
Employee benefits administrators subject to the Employee Retirement Income Security Act of 1974 (ERISA) must provide a summary plan description (SPD) to plan participants and their beneficiaries.
Below are the general rules outlined by the U.S. Department of Labor, Employee Benefits Security Administration (EBSA) in the Reporting and Disclosure Guide for Employee Benefits Plans (pdf).
General SPD Distribution Timing
New Plans
- New Plans: Within 120 days of the plan’s creation date
- New Participants: Within 90 days of the participant becoming covered under the plan (unless the plan is new, then within 120 days of the plan’s creation date)
Existing Plans / Participants
- An updated SPD must be furnished every 5 years if changes are made to the SPD information or a plan is amended (see “Summary of Material Modification” section)
- Otherwise, an SPD must be furnished every 10 years
- See 29 CFR § 2520.104b-2 - Summary Plan Description
General SMM Distribution Timing
A Summary of Material Modification (SMM) is required whenever there is a material change to the plan. Note that different rules apply if there is a reduction in health benefits.
- Material Reduction in Covered Services for health plans only: within 60 days after adoption of the change
- The best practice is to distribute the SMM in advance of the reduction if possible.
- All Other Material Changes: Within 210 days after the end of the plan year
- See 29 CFR § 2520.104b-3 - Summary of Material Modifications
NOTE: There is no need to distribute an SMM if the changes are incorporated into an updated SPD that is distributed within the applicable SMM timeframe.
General SBC Distribution Timing
Whenever there is a mid-year material modification that affects the content of the Summary of Benefits and Coverage (SBC), employers will need to distribute an updated SBC or a summary of the changes.
Unlike the SMM distribution rule, the updated SBC must be distributed 60 days before the date the change will become effective. This is the case whether the change is a reduction or an improvement in benefits.
Electronic Notification
It’s okay to post an SPD or other ERISA disclosure to your company intranet, online benefits portal, wiki, etc. Make sure you also send a notice to employees each time new ERISA documents are posted online. See 29 CFR §2520.104b-1(c) - Disclosure through electronic media.