Once you make an amendment to your plan, how and when you communicate with plan participants is an important ERISA requirement. A case this fall, Helton v. ATT, Inc. (Sept. 16, 2011), points to four important lessons in communication:
1. Answer plan participant questions in a timely and concrete manner
Your communication with plan participants is best put in writing whenever possible. Documenting answers to questions that come from plan participants about their
specific situation keeps everyone on the same page.
2. Prepare and distribute a Summary of Material Modifications (SMM) or Summary Plan Description (SPD)
You technically have 210 days after the plan year in which the changes are adopted to communicate changes. However, you’re better off preparing and distributing
materials as soon as possible to make sure that those affected by the changes can act accordingly. And, the task is complete – it won’t be overlooked with the passing of time.
3. Keep records of how and to whom SMM or SPD notices were sent.
If it’s possible for plan participants to somehow miss a piece of communication about plan changes, you need documentation to prove that the proper notice was sent in the time required by ERISA. Documentation may be as simple as a mailing list of recipients.
4. Remember that all plan participants and surviving beneficiaries need a notice, not just current employees.
This communication tip may seem obvious, but unfortunately, it’s not always followed.