Is the Summary Plan Description (SPD) required by law?

The Summary Plan Description (SPD) is indeed required by law under the Employee Retirement Income Security Act (ERISA). This law mandates that plan sponsors provide participants with a written summary of the plan, which outlines the benefits, rights, and responsibilities of both the participants and the plan administrators. The purpose of the SPD is to ensure that participants have clear and accessible information about their benefits so they can make informed decisions regarding their participation in the plan.

The requirement for the SPD applies broadly to most employee benefit plans covered by ERISA, including pension plans and welfare benefit plans. This makes the SPD an essential component of compliance for plan sponsors, as failing to provide an SPD may lead to penalties and compliance issues.

In contrast, the notions of it being optional, only applicable to certain plans, or reliant on state regulations do not align with the overarching federal requirements established by ERISA, which aim to protect the rights of employees regarding their benefit plans.