(a) Method of presentation. The summary plan description shall be
written in a manner calculated to be understood by the average plan
participant and shall be sufficiently comprehensive
[[Page 393]]
to apprise the plan's participants and beneficiaries of their rights and
obligations under the plan. In fulfilling these requirements, the plan
administrator shall exercise 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, the use of clarifying examples and illustrations, the use of
clear cross references and a table of contents.
(b) General format. The format of the summary plan description must
not have the effect to misleading, misinforming or failing to inform
participants and beneficiaries. Any description of exception,
limitations, reductions, and other restrictions of plan benefits shall
not be minimized, rendered obscure or otherwise made to appear
unimportant. Such exceptions, limitations, reductions, or restrictions
of plan benefits shall be described or summarized in a manner not less
prominent than the style, captions, printing type, and prominence used
to describe or summarize plan benefits. The advantages and disadvantages
of the plan shall be presented without either exaggerating the benefits
or minimizing the limitations. Thedescription or summary of restrictive
plan provisions need not be disclosed in the summary plan description in
close conjunction with the description or summary of benefits, provided
that adjacent to the benefit description the page on which the
restrictions are described is noted.
(c) Foreign languages. In the case of either--
(1) A plan that covers fewer than 100 participants at the beginning
of a plan year, and in which 25 percent or more of all plan participants
are literate only in the same non-English language, or
(2) A plan which covers 100 or more participants at the beginning of
the plan year, and in which the lesser of (i) 500 or more participants,
or (ii) 10% or more of all plan participants are literate only in the
same non-English language, so that a summary plan description in English
would fail to inform these participants adequately of their rights and
obligations under the plan, the plan administrator for such plan shall
provide these participants with an English-language summary plan
description which prominently displays a notice, in the non-English
language common to these participants, offering them assistance. The
assistance provided need not involve written materials, but shall be
given in the non-English language common to these participants and shall
be calculated to provide them with a reasonable opportunity to become
informed as to their rights and obligations under the plan. The notice
offering assistance contained in the summary plan description shall
clearly set forth in the non-English language common to such
participants offering them assistance. The assistance provided need not
involve written materials, but shall be given in the non-English
language common to these participants and shall be calculated to provide
them with a reasonable opportunity to become informed as to their rights
and obligations under the plan. The notice offering assistance contained
in the summary plan description shall clearly set forth in the non-
English language common to such participants the procedures they must
follow in order to obtain such assistance.
Example. Employer A maintains a pension plan which covers 1000
participants. At the beginning of a plan year five hundred of Employer
A's covered employees are literate only in Spanish, 101 are literate
only in Vietnamese, and the remaining 399 are literate in English. Each
of the 1000 employees receives a summary plan description in English,
containing an assistance notice in both Spanish and Vietnamese stating
the following:
``This booklet contains a summary in English of your plan rights and
benefits under Employer A Pension Plan. If you have difficulty
understanding any part of this booklet, contact Mr. John Doe, the plan
administrator, at his office in Room 123, 456 Main St., Anywhere City,
State 20001. Office hours are from 8:30 A.M. to 5:00 P.M. Monday through
Friday. You may also call the plan administrator's office at (202) 555-
2345 for assistance.''
[42 FR 37180, July 19, 1977]
