ERISA notices: Overview, definition, and example
What are ERISA notices?
ERISA notices are required disclosures that employers and plan administrators must provide to participants and beneficiaries under the Employee Retirement Income Security Act of 1974 (ERISA). These notices inform employees about their rights, benefits, obligations, and changes related to employer-sponsored retirement plans (like 401(k)s) and group health plans. The content and timing of these notices are regulated to ensure transparency and protect plan participants.
Why are ERISA notices important?
ERISA notices are important because they help employees make informed decisions about their benefits. They explain key features of a plan—such as vesting schedules, contribution limits, fiduciary duties, funding, and plan changes. Timely and accurate notices reduce confusion, support compliance with federal law, and protect employers from legal liability. Failing to provide proper ERISA notices can result in regulatory penalties and employee claims.
Understanding ERISA notices through an example
If a company offers a 401(k) plan, it must provide employees with a Summary Plan Description (SPD)—an ERISA-required notice that explains how the plan works, what the eligibility rules are, and how to claim benefits. If the plan changes—say, to reduce the employer match—the company must issue a Summary of Material Modifications (SMM) to notify participants of the change.
Example of how ERISA notices may be referenced in a benefits agreement
Here’s how a reference to ERISA notices may appear in a plan document:
"The Plan Administrator shall furnish all required ERISA notices, including but not limited to the Summary Plan Description, annual funding notice, and summary of material modifications, in accordance with applicable federal regulations and delivery standards."
Conclusion
ERISA notices are a critical compliance requirement for employers that sponsor retirement and health benefit plans. These disclosures promote transparency, help employees understand their benefits, and support informed decision-making. Employers should ensure they deliver all required notices on time and in the correct format to remain compliant and uphold employees’ rights under ERISA.
This article contains general legal information and does not contain legal advice. Cobrief is not a law firm or a substitute for an attorney or law firm. The law is complex and changes often. For legal advice, please ask a lawyer.