Are Welfare Benefit Plan Documents Available for Inspection?
A welfare benefit plan administrator must make certain documents available for inspection by any plan participant or beneficiary. These documents that can be inspected include copies of the plan description, the latest annual report, and the bargaining agreement, trust agreement, contract, or other instruments under which a welfare benefit plan was established or operated.
These documents must be made available by the plan administrator for examination by any plan participant or beneficiary at all times in the administrator's principal office within 10 days after a request is made for disclosure, in each employer establishment or union meeting hall in which at least 50 participants covered under the plan customarily work.
Exceptions. A small unfunded or insured welfare benefit plan is not required to make copies of the plan description and annual report available for examination by participants or beneficiaries. Only plan documents (trust agreement, collective bargaining agreement, etc.) under which the plan is established or operated are required to be made available for examination.
Similarly, a small welfare benefit plan that is part of a group insurance arrangement is not required to make copies of the plan description available for examination. The administrator of this plan is required to make available only copies of the annual report and plan documents under which the plan is established or operated.
Charge for copies. The administrator of a welfare benefit plan may charge a reasonable amount to cover the cost of furnishing documents to participants or beneficiaries who request them. The Labor Department has set limits on how much may be charged.
Although a summary plan description must be furnished automatically and without charge, an additional copy of the SPD supplied on request is subject to a reasonable charge.
What is a reasonable charge? The charge assessed by the plan administrator to cover the cost of furnishing documents is reasonable if it is equal to the actual cost per page to the plan for the least expensive means of acceptable reproduction and not over 25 cents per page.
No other charges for furnishing documents, such as handling or postage charges, may be made. Upon request of a participant or beneficiary, the administrator is to provide information about the copying charges for providing plan documents.
Penalty for failure to respond. The administrator is penalized if requested documents to participants or beneficiaries who specifically request them are not furnished. With the exception of those plans not required to furnish some items, all other requests should be fulfilled within 30 days. Penalties can amount up to $110 a day from the date of the failure or refusal. Additional relief may be ordered as well. No penalty will be assessed when matters are reasonably beyond the administrator's control.
In complying with the participant's or beneficiary's request, the information sought must be mailed to the last known address of the requesting participant or beneficiary.
The penalty for failure to furnish requested statements is in addition to the criminal penalties for conviction of a willful violation of the Employee Retirement Income Security Act (ERISA) reporting and disclosure rules. Such a conviction can result in a maximum fine to the individual of $100,000 ($500,000 if the violator is other than an individual) or imprisonment for not more than 10 years or both.