What plans are subject to ERISA documentation and disclosure requirements?
Both welfare benefit plans and pension benefit plans.
List the five main ERISA reporting and disclosure requirements.
- written plan document
- Summary Plan Description (SPD)
- Summary of Material Modification (SMM)
- Annual financial report (Form 5500),
- Summary Annual Report (SAR)
What is the purpose of ERISA’s written plan document requirement?
To formally establish and maintain the plan in writing, define benefits, name fiduciaries, describe funding, and outline plan rules.
Does ERISA specify exactly what must be included in a plan document?
No. ERISA requires a written document but does not specify exact required contents.
Names of fiduciaries,
Administrative procedures,
Funding requirements,
How benefits are paid,
Claims and appeals procedures, Amendment and termination procedures,
Asset distribution upon termination, statement allowing reasonable administrative expenses from plan assets.
Prudent elements to include in a plan document
What is a Summary Plan Description (SPD)?
A plain-language summary of the plan’s provisions and participant rights.
What must an SPD include?
Eligibility rules, Benefits, Plan operations, Funding information, Claims procedures, Statement of ERISA rights.
When must the initial SPD be distributed?
Within 120 days after the plan becomes subject to ERISA.
When must new participants receive an SPD?
Within 90 days of becoming a participant.
How often must updated SPDs be distributed?
Every 5 years if changes are made, Every 10 years if no changes are made.
By when must an SPD be distributed after the plan year ends?
By the 210th day after the close of the plan year to which it applies.
How must a legally married same-sex spouse be treated in a qualified retirement plan?
As a spouse for all qualified retirement plan purposes.
List key retirement plan rights that apply to same-sex spouses.
- Automatic beneficiary rights unless waived
- Joint and survivor annuity rights
- Pre-retirement survivor annuity rights
- Minimum distribution and rollover rights
- Loan and hardship withdrawal rights
- QDRO alternate payee rights
- Family attribution rules
What is an Investment Committee Charter?
A governance document outlining the committee’s authority, responsibilities, structure, and meeting procedures.
What should an Investment Committee Charter include?
Committee responsibilities, Reporting relationships, Member selection process, Meeting frequency, Roles of outside advisors.
What is an Investment Policy Statement (IPS)?
A document guiding how plan investments are selected, monitored, and evaluated.
Plan purpose, Roles and responsibilities, Investment menu structure, Performance benchmarks, Manager selection and termination criteria, Decision-making process.
Things an investment policy statement (IPS) should include.
What documents should be in place at minimum for managing plan investments?
Summary Plan Description, Investment Committee Charter, Investment Policy Statement.
What is the ideal size of an investment committee?
Typically five to seven members. More than ten is usually too large. An odd number helps prevent tie votes.
Who typically serves on an investment committee?
Senior management such as CFO or COO, Plan fiduciaries, HR or finance representatives, Advisors such as consultants, trustees, or recordkeepers.
How often should the investment committee meet?
At least annually, with quarterly or semiannual meetings considered best practice.
What topics should investment committee meetings cover?
Follow-up from prior meetings, Investment performance review, Regulatory updates, Vendor services and fees, Review of the IPS, Potential plan improvements.
How often should a recordkeeper RFP be issued?
Generally every three to five years.
What is a less demanding alternative to an RFP?
A Request for Information (RFI).
