ERISA was enacted by Congress for protecting funds of hard working workers and it doesn’t require the employer to offer any pension plans as it sets minimum standard for reporting for unions, corporations, and other entities for selection to provide a retirement benefit plan. This write-up will summarize the important ERISA reporting obligations, as called ‘Title 1 Basic Disclosure’. Participants or sponsor of the plan who want to obtain more detailed or in depth information for ERISA reporting and disclosure can visit ERISA website.
SPD or Summary Plan Description
It is the center part of ERISA report and disclosure requirements as it describes the key features of plan under ERISA in detail. Rights, benefits and obligations of every member of the plan must be clearly highlighted through easy-to-understand language.
These are the a few circumstances that trigger the requirement to provide plan participants a copy of SPD.
- Within 3 months or 120 days of the plan apt subjected to requirements of ERISA
- New participants of plan must be given a copy of SPD in 90 days of enrollment.
- Beneficiaries of plan must be given a copy of SPD within 90 days of the first payments of benefits.
- All the members of plan must be given a revised copy of SPD every 5 years if amendments or changes apply.
- Also after every 10 years, changes applied or not have been occurred to the SPD.
Besides many other requirements, SPD must identify the sponsor of the plan, all procedures that claim benefits and formulas used to measure time in years of participant’s services, COBRA rights, and process for claims that are denied.
Form 5500 yearly return or the Report of Employee Benefit Plan
It is required yearly disclosure filing every ERISA plan, direct filing entity or welfare plan. It was created jointly by the Internal Revenue Service, Department of Labor and Pension Benefit Guaranty Corporation to satisfy yearly filing requirements under both Internal Revenue Code and ERISA.
Major Reporting Entities of Form 5500 include, but they are not limited to;
- Name of plan, plan sponsor, and plan administrator
- Type of the plan i.e., multiemployer, multiple-employer or single-employer
- No. of total, retired, active, deceased or separated participants
- Benefit and plan funding schedules
Benefit Determination Notification
It includes information regarding benefit claim denials or approvals and must be provided to participants of the plan on schedule that depends on the plan and claim. When claim is rejected, the reasons of rejection and appeal procedures associated are clearly stated. For more information, contact professional ERISA consulting services or visit ERISA official website.