ERISA was endorsed by Congress to protect the retiree funds of hard working employees in USA. While the law doesn’t require any employer to offer any pension plan, it does pass a minimum federal standard and reporting requirement for unions, corporations and all other organizations to select to provide employees with a pension or retirement plan.
This article is all about the significant ERISA reporting obligations called ‘Title 1 Basic Disclosure’ requirement by the law. The sponsors of the plan or the contributors, who wish to obtain more detailed or in depth information for ERISA reporting and disclosure, are encouraged to visit the Employee Benefit Security Administration Division of American Department of Labor.
Summary Plan Description
The ‘Summary Plan Description’ or SPD is the core of ERISA reporting as well as disclosure requirements. It describes details of key features of ERISA plans. The rights, obligations and benefits of every plan member must be clearly stated by using easy to understand language.
The below circumstances can trigger a requirement for plan sponsor and provide participants of the plan with a copy ofSummary Plan Description.
- In 120 days of plan, it becomes subject to the requirements of ERISA.
- New plan participants should receive copy of SPD within 90 days after enrollment.
- The beneficiaries of the plan must receive copy of SPD within 90 days of initial benefits payment.
- All members of the plan should receive a revised version of SPD after every 5 years if amendments and changes are applied. After every 10 years, whether or not changes have been occurred to SPD, this practice should be performed.
Among various information requirements, the SPD should identify the sponsor of the plan, COBRA rights, procedures governing benefits claimed, formulae used for measuring years of service, and the process of appeals for claim denial.
Form 5500 Yearly Return or Report of Employee Benefit Plan
Form 5500 is required annual disclosure that is filed for each ERISA controlled pension plan, direct filing entity and welfare plan. It was jointly developed by Department of Labor, Internal Revenue Services and Pension Beneficial Guaranty Corporation to satisfy yearly filing requirements under Internal Revenue Code and ERISA as well.
Major elements of form 5500 to be reported but are not limited to;
- Name of the plan, its sponsors and the administrator of the plan
- Type of the Plan, i.e. single employer, multi-employer or multiple employers
- The number of total participants that are active, separated, retired, or deceased
- Plan benefits and funding schedules
You are advised to get in touch with a reliable company for ERISA consulting services to know more.