Plan sponsors should understand that under ERISA, plan participants are entitled to certain disclosures and documents. We should all know that a participant is entitled to the summary plan description, summary annual report, a fee disclosure if the plan is participant directed, an annual statement of benefit, and some other documents enunciated and codified in law.
A plan participant in Askew v RL Reppert Inc. sued their employer as plan administrator for failing to furnish requested documents as well as failing to provide an audit for the Form 5500 which was required. The plan sponsor was penalized $15,959 for by the Eastern District Federal Court of Pennsylvania. While the penalty of failing to fusion is the documents is $110 a day, the Court had the discretion to penalize $50 a day for failing to provide plan documents and a $1 a day for custodial agreements between the plan and the trust company.
This is t some large plan that was sued. This was against a small to medium sized plan who neglected their duties in providing documents and getting a plan audit that was required. If it could happen to a plan like that, I’m sure it can happen to thousands of plans that don’t understand their duty to plan participants.
