Certified Plan Sponsor Professional (CPSP) Practice Exam

When must participants be provided with a summary plan description (SPD) after they become covered by a plan?

1. Within 30 days from the date they become covered

2. Within 60 days from the date they become covered

3. Within 90 days from the date they become covered

4. Within 120 days from the date they become covered

The correct answer is: Within 90 days from the date they become covered

The correct timeframe for providing participants with a summary plan description (SPD) after they become covered by a plan is 90 days. This requirement is mandated by the Employee Retirement Income Security Act (ERISA), which ensures that employees receive critical information about their benefit plans to make informed decisions regarding their participation and understanding of the benefits being offered. The SPD must be delivered to participants within 90 days of them becoming covered by the plan, which allows time for the necessary administration and communication of information. This ensures that all covered participants have access to essential details about their rights and responsibilities under the plan, as well as the benefits that are available to them. This 90-day requirement is in place to maintain compliance with ERISA regulations and to help protect the interests of plan participants by ensuring they are informed about key aspects of their employee benefits in a timely manner.