What is the difference between a plan document and a summary plan description?

Generally, the plan document is a comprehensive written instrument describing the operation and administration of an employer's plan. The plan document is written in legalese and may be difficult for the average participant to read and understand. Section 402 of ERISA requires that benefits plans subject to the regulations must be established and maintained according to a written instrument. The written plan document must clearly identify certain basic information about the plan, including the following:

• The named fiduciary who will have the authority and responsibility to administer the plan.

• Procedures for amending and terminating the plan.

• The source of plan contributions.

• The allocation of responsibilities for the operation of the plan between the employer and the insurance carrier or third-party administrator.

The plan document tells the plan participants about the benefits they are entitled to under the plan and provides guidelines to be used by the plan administrator in decision-making when it comes to plan operations. It is not required to be distributed to the participants unless requested. 

The summary plan description (SPD) is simply a summary of the plan document required to be written in such a way that the participants of the benefits plan can easily understand it. Unlike the plan document, the SPD is required to be distributed to plan participants. ERISA provides specific guidelines regarding the required content of the SPD and the required style and format. In effect, because the SPD is summarizing the plan document, the plan document must encompass the content required for the SPD.

In day-to-day benefits administration, it is important to understand the distinction between the two documents and ensure the documents are consistent in their terms. Plan amendments must be made to both documents. The plan document provides more detail than the SPD and should be referred to when administering the plan.

Confusion often arises for employers with fully insured plans as the insurance carrier does not provide the ERISA plan document or the SPD. This is the responsibility of the plan administrator. The insurance carriers typically provide employers with a master contract, certificate of coverage or summary of benefits, and employers may mistakenly assume this meets the ERISA requirement. These insurance-provided documents contain some but not all of the content required under ERISA. Therefore, in practice, "wrap" documents are combined with the insurance-provided documents to meet the ERISA requirements. This means the employers will "wrap" the insurance documents with another document containing the missing content required under ERISA.