ERISA Plan Compliance: Documents, Reporting, and Fiduciary Duties

The Employee Retirement Income Security Act, codified beginning at 29 U.S.C. § 1001, governs most retirement and welfare benefit plans maintained by private employers. It does not require an employer to offer a plan. Once a plan exists, it dictates how the plan must be documented, what participants must be told, what must be filed, and how the people running it must behave.

Governmental plans and most church plans are excluded. Nearly everything else a private employer sponsors — retirement, medical, dental, disability, life, and many severance arrangements — sits inside the statute.

Which arrangements are covered

Coverage turns on whether the employer has established or maintained an ongoing arrangement to provide benefits, not on whether anyone labeled it a plan. That catches arrangements employers do not think of as benefit plans: employer-funded medical reimbursement arrangements, some employee assistance programs offering counseling, and severance policies with enough administrative discretion to require an ongoing scheme.

The recurring surprise is welfare benefits. Many employers assume the insurance carrier handles compliance because the carrier issues the certificate of coverage. The carrier's booklet describes the insurance contract. It does not necessarily contain the ERISA-required elements — named fiduciary, allocation of responsibility, amendment and termination procedure, claims procedure, and funding description. That gap is why wrap documents exist.

The document set that must exist

• A written plan instrument establishing the plan and providing a procedure for amendment and for identifying who may amend.
• Designation of one or more named fiduciaries with authority to control and manage plan operation and administration.
• A funding arrangement — a trust holding plan assets, or an exception such as benefits paid from insurance contracts or from the employer's general assets for unfunded welfare plans.
• A summary plan description written so an average participant can understand it, describing eligibility, benefits, circumstances causing loss of benefits, claims procedures, and participant rights.
• A summary of material modifications when the plan changes, or a restated summary.
• A written claims and appeals procedure meeting the applicable regulation, with different timing rules for retirement, health, and disability claims.
• Service-provider agreements with fee disclosure, plus records supporting the fiduciary decisions behind them.
• A fidelity bond covering persons who handle plan funds, in the amount the statute prescribes.

Distribution deadlines matter as much as content. A summary plan description generally must reach a new participant within 90 days of coverage beginning, and a new plan's summary within 120 days after the plan becomes subject to the statute. Participants and beneficiaries may also request plan documents in writing, and failure to furnish them within 30 days can expose the administrator to a per-day penalty.

Annual reporting and what it exposes

Most covered plans file an annual return, Form 5500, with schedules that vary by plan type and size. Filing is electronic. For a calendar-year plan, the return is due on the last day of the seventh month after the plan year ends, with an extension available on request. Small plans meeting the conditions may use the simplified return; larger plans generally require an independent qualified public accountant's report. Certain small, unfunded or insured welfare plans are exempt from filing altogether.

Participants receive a summary annual report or, for defined benefit plans, an annual funding notice. Retirement plans have additional participant statement duties.

Verify before relying: Filing thresholds, participant-count rules for the audit requirement, and the schedules attached to the return have been adjusted more than once in recent filing seasons. Confirm the requirements for the specific plan year against current Employee Benefits Security Administration and IRS instructions rather than repeating last year's approach.

The return is the most visible compliance signal a plan produces. A missing filing, a jump in participant count without a corresponding audit report, or a late deposit answer on the financial schedule are all readable from outside. As of mid-2026, delinquent filings remain correctable at reduced penalty rates through the Department's voluntary compliance program for late filers, but that route closes once the agency has issued a notice of failure to file.

Fiduciary duties, and who has them

ERISA's conduct standard has four components. A fiduciary must act solely in the interest of participants and beneficiaries and for the exclusive purpose of providing benefits and defraying reasonable administrative expenses; with the care, skill, prudence, and diligence a prudent person acting in a like capacity and familiar with such matters would use; by diversifying investments to minimize the risk of large losses unless clearly prudent not to; and in accordance with the plan documents, insofar as they are consistent with the statute.

Fiduciary status is functional. A person becomes a fiduciary by exercising discretionary authority over plan management or administration, or by exercising authority or control over plan assets — regardless of title, and regardless of whether anyone was formally appointed. A benefits manager who selects investment options is a fiduciary as to that decision. The same person deciding whether to offer a plan at all is acting as the employer, not as a fiduciary, because plan design is a settlor function.

Two duties generate most litigation. The first is the continuing obligation to monitor investments and remove imprudent ones, which the Supreme Court reaffirmed in 2015 and again in 2022 — a plan cannot rely on the prudence of an initial selection made years earlier. The second is fee reasonableness. Neither duty requires the cheapest option; both require a process, evidence of the process, and a decision that follows from it. The duty of loyalty analysis will be familiar to anyone who has worked through the standards in fiduciary duties of executors and trustees, though the enforcement architecture is entirely different.

Where plans actually fail

• Late deposit of withheld contributions. Amounts withheld from pay become plan assets as soon as they can reasonably be segregated. The outer regulatory limit is not a target, and small plans have a shorter safe harbor.
• Definition of compensation applied inconsistently. Deferrals calculated on a payroll code that does not match the plan's compensation definition produce a correction obligation across every affected participant and year.
• Eligibility run by the payroll system rather than the plan document. Part-time, seasonal, and rehired employees are the usual casualties.
• No committee, no charter, no minutes. Prudence is proved by process. Absent a record, a defensible decision looks identical to no decision at all.
• Stale summaries. A summary plan description that predates two amendments misstates the plan to participants and undercuts the administrator's own interpretation in a claim.
• Unbonded handlers. The fidelity bond is inexpensive, is asked about on the annual return, and is routinely forgotten after a change in payroll staff.
• Misclassified workers excluded from coverage. If a contractor is later treated as an employee, plan eligibility follows the plan's own definition, which may not track the tax result — see worker misclassification audits and settlement options.

Correction routes when a failure is found

Both agencies operate voluntary correction programs, and the choice depends on the failure. Operational and document failures in tax-qualified retirement plans are generally corrected through the IRS correction system, which permits self-correction of many failures without a filing and a formal submission for others. Fiduciary breaches such as late deposits, certain prohibited transactions, and improper plan expenses are addressed through the Department's voluntary fiduciary correction program, which can carry relief from specified excise taxes when its conditions are met. Delinquent annual returns run through the separate late-filer program.

All of these share one condition: they are voluntary. Availability generally ends once the plan is under examination or the agency has issued notice. A failure identified internally is a very different problem from the same failure identified on audit, and the practical advice follows from that gap — find it first.

Questions the desk gets

Our health coverage is fully insured. Do we still have ERISA obligations?

Yes. Insurance transfers the benefit risk, not the plan sponsor's statutory role. The employer still needs a plan document containing the required elements, a summary plan description that satisfies the content rules, a claims procedure, and, unless an exemption applies, an annual filing. Many employers meet the document and summary requirements by wrapping the carrier's certificate in a document that supplies the missing ERISA-specific terms.

Can we hand fiduciary responsibility to our recordkeeper?

Only in part, and never entirely. A plan can appoint an investment manager or delegate defined functions, which shifts responsibility for those functions. What cannot be delegated is the duty to select and monitor the delegate prudently. Many service providers contract expressly as non-fiduciaries performing ministerial tasks. Read the agreement: the label in the marketing material and the allocation in the contract are frequently different.

Does the plan have to give a participant everything in the file?

The statute entitles participants and beneficiaries to specified documents on written request, including the plan document, the latest summary, the latest annual report, and certain contracts. Denied claimants have broader access to documents relevant to the claim under the claims regulation. Failure to furnish requested documents within the statutory window can support a per-day penalty against the administrator that is independent of the benefit dispute itself.

Who gets sued when something goes wrong?

The plan, the administrator, the sponsoring employer, and named individuals — often together. Fiduciaries can be personally liable to make good losses to the plan, and co-fiduciary rules extend liability to someone who knowingly participates in or conceals another fiduciary's breach. Corporate indemnification and fiduciary liability insurance are the usual protections, and their interaction is covered in director and officer indemnification and D&O insurance.

How to use this brief

Build the inventory before the analysis. List every benefit arrangement the company funds or facilitates, then mark which ones have a written plan document, a current summary, a distribution record, a filing history, and an identified fiduciary. Most sponsors find at least one arrangement with none of those.

Then separate the two categories of work. Document and disclosure gaps are fixable on a schedule and cost little beyond attention. Fiduciary process gaps — no committee, no fee benchmarking, no monitoring record — take longer to build and are the ones that decide litigation. Check current program terms and filing rules directly with the Employee Benefits Security Administration and the IRS employer guidance, and coordinate the payroll side with payroll records and wage-hour audits. Related material sits on the Employment & Workforce desk.