The text of a summary plan description (SPD) is usually the product of a tug-of-war between cautious ERISA attorneys who worry about the use of general, simple statements, and human resources professionals familiar with their average employees’ reading level. The attorneys often tug harder, and the result is a document that many employees pick up, glance at, and promptly toss. That’s not a good outcome.

What Does ERISA Require?

ERISA regulations describe the style and format for your SPD. Key language in the SPD must be written so that it’s “understood by the average plan participant.” It must be “sufficiently comprehensive to apprise the plan’s participants and beneficiaries of their rights and obligations under the plan.”

And how can you make that calculation? The regulations’ “method of presentation” guidance indicates that you should factor in participants’ “level of comprehension and education” as well as the complexity of the plan’s terms. Taking these factors into consideration will usually require:

  • The limitation or elimination of technical jargon and of long, complex sentences,
  • The use of clarifying examples and illustrations,
  • Clear cross-references, and
  • A table of contents.

The regulations also caution against presenting the facts in a way that would “have the effect” of misleading or simply not informing participants and beneficiaries. Specifically, the regulations require that descriptions of benefit limitations, reductions and other restrictions of benefits not be relegated to fine print or footnotes. Also, you have to present both the plan’s advantages and disadvantages without exaggerating the benefits or minimizing the limitations.

Finally, adapt legal documents like SPDs to emerging writing practices using “inclusive” language that seeks to embrace gender diversity.

Get it Right

An SPD is one of the most important documents of your plan. It’s one that participants will come back to time and time again. Contact your benefits specialist to make sure your SPD meets the requirements and is written in a way that participants will read and understand.


Headshot of Jenise Gaskin.

Related Insights