Summary of Material Modification (SMM)

ERISA Documentation & Form 5500

Summary of Material Modification (SMM)

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A Summary of Material Modifications (or SMM) provides a summary of material changes to the plan and should be understood by the average plan participant.

Content

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There is no prescribed format for the SMMs, but they must communicate changes in a manner that is understandable to participants. An effective SMM will include:
(i) plan name and SPD name; (ii) plan provisions being modified (maybe with references to the SPD pages); (iii) clarification that the SMM is a modification of the SPD; (iv) contact names; and (v) explanation of how to request another copy of the SPD.

Distribution

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An SMM must be distributed to all plan participants each time the plan is materially amended, or when changes are made that affect the content of the SPD, and a new SPD is not created.

Timing

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An SMM must be distributed within 60 days following an employer's decision to implement a material reduction in plan benefits. The deadline is extended to 210 days following the close of a plan year when the amendment is not a material reduction in benefits.

Example:

Lydia is enrolled in her employer’s group health plan, which runs from January 1^st, 2020 to December 31^st, 2020. On March 1^st, 2020 Lydia’s employer changed the location of their home office, and therefore the contact information in Lydia’s SPD is no longer correct. Since this is not considered a material reduction in covered benefits, Lydia’s employer can wait until 210 days from December 31^st, 2020 (July 29^th, 2020) before they send Lydia a Summary of Material Modifications. Instead of sending an SMM, Lydia’s employer could decide to send an updated SPD by the same deadline.