The US Department of Labor’s Pension and Welfare Benefits Administration (PWBA) has published final rules regarding the implementation of changes in the summary plan description (SPD) filing requirements enacted as part of the Taxpayer Relief Act of 1997 (TRA’97).
One rule clarifies the department’s authority to request SPDs and other documents from plan administrators on behalf of participants and beneficiaries. The rule also provides for the assessment of civil penalties, up to $1,000, for the failure or refusal of a plan administrator to provide the department with the requested documents.
The Taxpayer Relief Act of 1997 (TRA ’97) eliminated the requirement under ERISA that employee benefit plan administrators automatically file summary plan descriptions (SPDs) and summaries of material plan modifications (SMMs) with the DOL but added a requirement that administrators must provide, on request, any documents relating to the plan – including the SPD and SMM.
Plan sponsors must respond within 30 days of a request by the DOL or face a penalty of up to $100 a day from the date of such failure, but no more than $1,000 per request (barring difficulties ‘reasonably beyond’ the control of the administrator).
Following the posting of a notice in the Federal Register in August 1999, the DOL received a number of comments. According to the DOL, most of the comments were concerned with:
– What documents will be requested by the Department and
– on whose behalf the requests would be made
Concerns were expressed that some participants – and some that were not participants – would simply use the Department’s clout as a means of ‘harassing’ their employer. Additionally, there were concerns that those requests would include materials of a proprietary and confidential nature that participants and beneficiaries would not generally have access to.
In the new regulations, the DOL has clarified that the documents to be requested from plan administrators by the Department on behalf of participants and beneficiaries are limited to those which participants and beneficiaries have a statutory right to examine and obtain copies. The DOL also noted that those interventions will be limited to those circumstances where a participant or beneficiary’s written request has been ignored by the plan administrator – providing the administrator with an opportunity to question the status of the requestor in conjunction with the request.
However, the DOL reiterated that it has, and will continue to exercise, discretion in requesting updated SPDs from the plan administrator, either on its own or a participant’s behalf.
The DOL rejected a suggestion that plan sponsors be able to charge reasonable costs for reproduction of the documents, as many do for participant requests – noting that their involvement would come only after a written request from the individual to the plan – when such a charge could have been imposed.
The regulation also clarifies that documents sent to the DOL by certified mail will be considered ‘received’ on the date of mailing.
Other concerns were expressed on behalf of multiemployer plans, which are typically quite decentralized in administration, and on behalf of plans confronted with multiple requests, one after another. The DOL rejected a suggestion that plan administrators have a mechanism for filing for extensions of time to comply in such circumstances, noting that the