What Are Your Rights Under ERISA Section 105?
ERISA Section 105 grants you legal rights to key information about your employee benefit plan, ensuring transparency and accountability from plan administrators.
The Employee Retirement Income Security Act of 1974 (ERISA) is a federal law that establishes standards for most voluntarily established retirement and health plans in private industry. Its purpose is to protect the interests of participants and their beneficiaries. ERISA achieves this by requiring plan sponsors to provide participants with information about their plans, setting standards for plan managers, and establishing an appeals process for benefits.
A component of this protection is Section 105 of ERISA, which grants employees the right to access detailed information about their benefit plans. This provision enables individuals to understand their benefits, monitor their accounts, and enforce their rights by ensuring they have the necessary facts to make sound decisions and hold plan managers accountable.
Automatically Provided Plan Information
Plan administrators are legally required to furnish certain documents to participants automatically and free of charge. The primary document is the Summary Plan Description (SPD), a comprehensive but easy-to-understand guide to the plan. It must be given to a new participant within 90 days of their enrollment.
The contents of the SPD are regulated to provide a full picture of the benefit plan and must include:
- Eligibility requirements, such as age or service conditions.
- A clear description of the benefits offered, including how they are calculated and when they become vested.
- Procedures for filing a claim for benefits and the remedies available if a claim is denied.
- The identity of the plan administrator and the source of plan contributions.
- A formal statement of the rights guaranteed to participants under ERISA.
When a plan undergoes significant changes, participants must be notified through a Summary of Material Modifications (SMM). The SMM describes any alteration to the plan’s terms. For most changes, the plan administrator must distribute the SMM within 210 days after the end of the plan year in which the modification was adopted.
If a change results in a material reduction of covered services or benefits, a more accelerated timeline applies. In these cases, the notice must be provided within 60 days of the change being formally adopted, allowing them to adjust their financial and healthcare planning accordingly.
Documents Available Upon Written Request
Beyond the information provided automatically, ERISA grants participants the right to request a wider array of plan documents to gain a more in-depth understanding of their benefits. Having access to these materials allows participants to see the full legal and financial structure of their benefit plans, which can be particularly useful when evaluating benefits, planning for retirement, or in the event of a dispute.
One of the documents available is the latest full annual report, known as the Form 5500. This report is filed with the Department of Labor and contains detailed financial information about the plan, including its assets, liabilities, income, and expenses. Reviewing the Form 5500 can give a participant insight into the financial health of their plan.
Participants are also entitled to receive a copy of the full, official plan document. While the Summary Plan Description (SPD) provides a readable summary, the plan document is the formal legal text that governs the plan’s operation. If the plan is funded through a trust, participants can request the trust agreement and other governing instruments, such as contracts with service providers.
The Document Request Process
To obtain the detailed documents you are entitled to, you must submit a proper written request. An email is considered a valid written request and should clearly state your name, identify you as a plan participant or beneficiary, and specify the exact documents you are seeking.
The request must be directed to the plan administrator. You can find the official name and contact information for the plan administrator in your Summary Plan Description (SPD). In many corporate benefit plans, the employer itself is the designated plan administrator.
Once a valid written request is submitted, the plan administrator is required to furnish the requested documents within 30 days. The administrator may charge a reasonable fee to cover the cost of copying, but this charge cannot be excessive.
Penalties for Non-Compliance
ERISA includes enforcement provisions to ensure that plan administrators comply with their disclosure obligations. If an administrator fails or refuses to provide the requested documents within the 30-day timeframe, they can face financial penalties. These consequences are outlined in Section 502 of the statute.
A court has the discretion to hold a plan administrator personally liable for penalties up to $110 per day for each day the documents are late, starting from the 31st day after the request was made. The purpose of this penalty is not to compensate the participant but to punish the non-compliance and deter future delays.
The imposition of these penalties is not automatic. A participant or beneficiary must file a lawsuit in federal court to seek enforcement of their rights and ask the court to impose the penalty. The court will then evaluate the circumstances of the delay, such as the reason for the failure to respond and whether the administrator acted in bad faith, before deciding whether to assess a penalty and in what amount.