Can you combine the Wrap SPD and Wrap Plan Document?

ERISA has separate and distinct legal requirements for summary plan descriptions (SPDs) and plan documents. Under the law, SPDs must be written in a manner "calculated to be understood by the average plan participant." In fulfilling this SPD requirement, the plan administrator is responsible for exercising considered judgment and discretion by taking into account such factors as the level of comprehension and education of typical participants in the plan and the complexity of the terms of the plan. Consideration of these factors "will usually require the limitation or elimination of technical jargon and of long, complex sentences."

By contrast, the plan document must include specific items required under federal laws such as ERISA and HIPAA, regardless of their complexity. In addition, it must contain all technical and legal specifics that are not only required to sponsor and administer the plan, but also to withstand any legal challenges that may be brought against the plan or the employer.

Including the lengthy and often technical terms of the plan document in the SPD is likely to cause confusion for the average plan participant, rather than promote an understanding of plan benefits and eligibility requirements. Similarly, omitting these details from the plan document would result in a document that could be legally inadequate.

Therefore, separate documents are recommended to address these separate legal requirements.