Summary of Material Modification
(Employee Benefit Plan)

Summary

This template is a summary of material modification (SMM) used to notify participants in an employee benefit plan subject to the Employee Retirement Income Security Act (ERISA) of a material change in the terms of the employee benefit plan not reflected in its last summary plan description (SPD). This template contains practical guidance and drafting notes. The plan administrator of an ERISA employee benefit plan must provide an SMM to each participant covered under the plan and each beneficiary receiving benefits under the plan (other than terminated vested participants or their beneficiaries where the modification will not affect their benefits, unless specifically requested) where a material change is made to the plan's SPD. 29 C.F.R. § 2520.104b-3(a). The SMM must be written in a manner calculated to be understood by the average plan participant and distributed not later than 210 days after the close of the plan year in which the modification was adopted (whether or not effective at such time). However, for group health plans, the plan administrator must provide an SMM for any material reduction in covered services or benefits to participants not later than 60 days after the date the modification is adopted. 29 C.F.R. § 2520.104b-3(d). (A special rule extending this period for plans that regularly communicate plan information to participants is largely made irrelevant by the Patient Protection and Affordable Care Act's summary of benefits and coverage (SBC) notice rules, which impose a separate 60-day notice period for SBC modifications. 29 C.F.R. § 2590.715-2715(b). Electronic delivery is permissible following the regulation in that regard. 29 C.F.R. § 2520.104b-1(c), and see Electronic Disclosure Rules (ERISA Safe Harbors). The SPD supplied to any new participant in the plan must be accompanied by all SMMs which have not been incorporated into the SPD. 29 C.F.R. § 2520.104b-3. The plan administrator must also provide the SMM upon request (1) to the Department of Labor, within 30 days, and (2) for ERISA pension plans, to a terminated vested participant or beneficiary that did not receive the SMM (because the material modification would not affect such individual's benefits) without charge. ERISA § 502(c)(6) (29 U.S.C. § 1132(c)(6)); 29 C.F.R. § 2520.104b-4(c). For additional information about SPD requirements, see Summary Plan Description Rules for ERISA Benefit Plans and the Summary Plan Description Resource Kit. For a full listing of key content covering retirement plan notification requirements, see ERISA Retirement Plan Notices Resource Kit.