Summary Plan Descriptions

I love SPDs. This is a feeling not universally shared by those clients and colleagues who are tasked with developing and maintaining them (or even most of us who receive them).

When I first began working on SPDs, I didn’t fully appreciate them. I often described them in terms that weren’t always (let’s just say) the most flattering. However, more exposure to these documents has helped me value their finer points.

Benefits make a difference. Benefits are a critical part of employees’ total rewards from their employer. A thoughtfully developed benefits program provides a safety net for employees and their families. How employees participate in these programs can affect their overall financial picture, now and far into the future.

I create multiple communication/education programs associated with employee benefits, ranging from recruiting to new hire to annual enrollment materials and beyond. SPDs assume a unique position in this communication universe. In many ways, they are the backbone of any benefits program.

SPDs are legally mandated under the Employee Retirement Income Security Act of 1974 (ERISA). ERISA specifies information, timing and distribution requirements to make sure participants are informed about how their benefits work and legal protections provided to them. [ERISA background]

SPDs provide employees important legal and regulatory details, such as rights and protections provided under ERISA. These include where to go for help; who is responsible for running the plan and what their duties entail; what benefits are insured, e.g., defined benefit plans under the Pension Benefit Guaranty Corporation; what rights are in place if a claim is denied; and required notices, such as the Women’s Cancer Rights Act and the Uniformed Services Employment and Reemployment Rights Act.

SPDs are a comprehensive user’s manual and reliable reference tool. The SPD provides information about eligibility, enrollment, timing requirements, benefits provided, where to go for more information and much more. Rules can be complicated and have big financial implications.  [Requirements for a 401k SPD]

Participants are encouraged to read the documents carefully and keep them in a convenient place for future reference. Now SPDs are commonly posted electronically for easy access at any time.

Keeping an SPD up-to-date is the realm of a team of benefit professionals—HR staff, technical benefit consultants, specialized attorneys, and communicators. Legal contracts, insurance policies and documents that spell out how a benefit plan works must be translated into understandable language for the average person. [SPD Development Strategy]

Such an important document deserves our respect. We should all view the SPD as a valuable resource that helps employees find information, use their benefits effectively and appreciate their employer’s investment in their well-being.

For those  reasons, I love SPDs!

Pat Dodd is a senior consultant  at Smith Communication Partners.