QUESTION: Our company employs a number of individuals who speak very little English. Do we have to furnish them with translated summary plan descriptions (SPDs) or summaries of material modifications (SMMs)?
ANSWER: ERISA does not require SPDs or SMMs to be translated into languages other than English, but if your plan covers a specified number of participants who are literate only in the same non-English language, you will be required to provide assistance in that language and to highlight the availability of the assistance in the SPD or SMM. Here is a summary of the requirements:
What Plans Must Provide Language Assistance? A large plan (100 or more participants at the beginning of a plan year) must provide assistance in a non-English language if the lesser of (i) 10% of participants, or (ii) 500 participants (or more) are literate only in the same non-English language. A small plan (fewer than 100 participants) must provide non-English language assistance if 25% or more of the participants are literate only in the same non-English language. These rules apply ERISA’s definition of “participant,” meaning that you only count employees or former employees (e.g., retirees) who are covered by the plan, and not other covered individuals (such as spouses).
What Information Must Appear in the SPD or SMM? If your plan is required to provide language assistance, the SPD or SMM must contain a prominent statement, in the applicable non-English language, offering assistance and explaining how to obtain it. To comply with the prominence requirement, the statement should appear at the beginning of the SPD or SMM or on its cover. Here is sample language (based on an example in the DOL regulations) that can be translated into the non-English language:
What Language Assistance Must Be Available? The assistance provided need not be in writing but must be “calculated to provide [participants] with a reasonable opportunity to become informed as to their rights and obligations under the plan.” This will require a contact person fluent in the applicable non-English language and capable of accurately informing individuals of their rights and obligations under the plan. Because of the uncertainty inherent in oral communications of benefit plan information, some plans opt to prepare written materials in the non-English language, even though doing so is not expressly required.
Keep in mind that these rules do not apply to all types of plan-related materials. For example, the summary of benefits and coverage is subject to different standards for furnishing materials in languages other than English (see our Checkpoint Question of the Week). And COBRA does not require notices to be translated into non-English languages (see our Checkpoint Question of the Week).
For more information, see EBIA’s ERISA Compliance manual at Section XXIV.J.10 (“Offer of Assistance in Non-English Language”). See also EBIA’s 401(k) Plans manual at Section XXIX.C.3 (“Foreign-Language Assistance”), and EBIA’s Self-Insured Health Plans manual at Section XXVIII.B (“Summary Plan Description (SPD) and Summary of Material Modifications (SMM)”).
Contributing Editors: EBIA Staff.