What is a Summary Plan Description?
A Summary Plan Description (SPD) is the package your employer is legally required to mail to you upon the qualifying event. In fact, if the employer doesn’t make a good faith effort to mail you the package, you can sue for damages! However, if the employer can show that it made an effort to mail the package, then you have no grounds on which to sue them. Below is an example of a court case in which a former employee attempted to sue her former employer because she never received a Summary Plan Description and how the employer, ENI Technology, acted despicably.
In Sunderlin v. First Reliance Standard and ENI Technology (U.S. District Court, Western District of New York, Dkt. No. 00-CV-6253, November 4, 2002), Terry Sun sued ENI Technology on the grounds that ENI denied her disability benefits and that ENI failed to provide a Summary Plan Description in a timely manner.
Sunderlin had made numerous requests for an SPD but they were ignored for seemingly frivolous reasons. ENI responded to the first request by sending her a letter stating that the person she addressed the request to no longer worked there. Her second request was met with a copy of the disability insurance policy and subsequent requests were useless. ENI claimed that the insurance policy they mailed was the SPD.
The ruling of the court was that ERISA required that a plan administrator send a copy of the latest Summary Plan Description upon request and it must be accurate and comprehensive, explaining the rights and obligations of participants under the employer’s plan. And it has to be written in plain enough English so that the average participant can understand it!
The court, in reviewing the policy, decided the policy that ENI provided wasn’t an SPD because it failed to contain the name of the plan, the name or address of the administrator, or even explain the denial of claims procedure. It was obtuse, confusing, and even contained incorrect information. Ultimately, the court assessed a fine of $15 per day for 1165 days for a total award of $17,475 – even adding that ENI acted in bad faith throughout litigation.