Debunking SPD Myths, Part 2: Think That Emailing Your SPD to Employees is Always Enough? Think Again

Most employers are familiar with the requirement to prepare and distribute a summary plan description (“SPD”). Many employers, however, assume that Department of Labor (“DOL”) disclosure requirements are consistent with the practices and needs of the 21st century. Unfortunately, this is generally not the case. Those disclosure regulations have not been updated in more than 15 years, meaning that many employers still need to print and mail SPDs.

As part of our ongoing “Debunking SPD Myths” series, we will examine the current state of the electronic disclosure requirements and provide some tips for how different types of employers might easily (or not so easily) comply with the regulations.

Myth: Posting in a Break Room or Computer Kiosk Complies with the Regulations

DOL regulations require that SPDs be furnished in a way “reasonably calculated to ensure actual receipt,” using a method “likely to result in full distribution.” DOL Reg. 2520.104b-1. The regulation specifically lists both first-class mail and hand delivery as acceptable methods of distribution.

The regulation is clear that posting an SPD in a break room or on an internal intranet is not sufficient in of itself. Additionally, providing a computer kiosk with electronic access to an SPD is not sufficient.

The regulation also lists electronic delivery as an acceptable method, but only if specific requirements are met. These requirements depend on whether the employee receiving the SPD is reasonably expected to use computers to perform job-related duties.

Myth: Simply E-mailing the SPD to Office Employees Complies with the Regulations

Employees who access electronic information as an “integral part of their duties” and who have the ability to effectively access documents published electronically where they are reasonably expected to perform their duties can be provided an SPD in an electronic format. However, a number of additional requirements apply:

  • Notice must be provided to each employee, at the time the SPD is provided, explaining the significance of the document;
  • The employee must be advised of his or her opportunity to obtain paper copies of any SPD provided electronically, free of charge;
  • The document must be in the same style and format as any paper SPD;
  • The employer must ensure that the electronic distribution will “result in actual receipt of information” (i.e., the employer should use return-receipt); and
  • The employer must ensure that the confidentiality of any personal information is protected.

While there are some additional hoops to jump through (in particular, the requirement for return-receipt), most employers with an office-based workforce are able to comply with the electronic SPD requirements. However, when it comes to non-employees (e.g., retirees, COBRA qualified beneficiaries, and other separated and deferred vested participants) and workforces with employees who do not regularly use computers, such as production workers, a more complex scheme applies.

Myth: E-mailing an SPD to Employees Without Work-Related Computer Access and Non-Employees Complies with the Regulations

In addition to the above requirements, employees without work-related computer access and non-employees must be accommodated in the following manner:

  • The individuals must provide affirmative consent to electronic receipt, after agreeing to a pre-consent statement that explains:
    • The right to request a paper version of the SPD;
    • The other types of documents that will be provided electronically;
    • The individual’s right to withdraw consent at any time, as well as the procedures to do so; and
    • The hardware and software requirements needed to access the electronic document.
  • The above pre-consent document may itself be provided electronically only if the employer has a current and reliable e-mail address for the individual;
  • If hardware or software requirements change, a revised statement must be provided;
  • If the documents are provided online, the affirmative consent must be given in such a manner that demonstrates the individual’s ability to access the documents in electronic form; and
  • The employer must keep a record of the individual electronic delivery addresses, individual consents, and return-receipts of each emailed document.

While the cost of printing and mailing SPDs is not particularly appealing, in our experience, employers with a mixed workforce or those providing SPDs to retirees, COBRA qualified beneficiaries, or deferred vested employees tend to simply provide paper copies of the SPDs as opposed to meeting the rigorous set of requirements outlined above.

The Consequences of Failing to Appropriately Provide an SPD

The failure to appropriately provide an SPD could have a number of negative consequences for an employer.  Most obviously, the $110 per day penalty referenced in my earlier post may apply. Additionally, courts may be unwilling to consider SPD language that might otherwise resolve an unclear plan provision to the employer’s benefit. Finally, with respect to health plans, an employer might not be able to enforce COBRA, claims and appeal, or limited statute of limitations language contained in an improperly distributed SPD.

2018 Executive Order and Hope for the Future

In August 2018, President Trump signed an Executive Order on “Strengthening Retirement Security in America.” Part of that Executive Order requested a review from the Secretary of Labor and the Secretary of Treasury on the potential for “broader use of electronic delivery as a way to improve the effectiveness of disclosures and to reduce their associated costs and burdens.” According to the deadline set by President Trump, that review should be completed no later than August 2019.


The SPD electronic disclosure rules can be complex and daunting for employers. This is where consulting with an experienced benefits attorney and creating a comprehensive plan to comply with the electronic disclosure requirements can drastically reduce the amount of time that human resources professionals spend on administrative SPD issues.

See part 1 of our “Debunking SPD Myths” series: The SPD Basics, and (Almost) Every Employer Needs One

About the Author

Eric W. Gregory is an Associate in Dickinson Wright’s Troy office where he assists clients in all areas of employee benefits law, including qualified retirement plans, welfare plans, and non-qualified compensation programs. Eric can be reached at 248-433-7669 or and you can visit his bio here.