What Are the Core Erisa Compliance Requirements?

Plan sponsors typically bear liability for selecting and monitoring service providers, including investment managers and record keepers, while administrators handle day-to-day operations like benefit calculations and participant communications. Both roles carry fiduciary status when exercising discretion over plan assets or participant rights. A plan sponsor who fails to monitor a service provider's fees or performance can face breach-of-duty claims even if the administrator processed transactions correctly. Practical protection requires written service-provider agreements that specify performance standards and fee caps, regular audits of administrator conduct, and documented review meetings at least annually.

ERISA requires fiduciaries to disclose conflicts, including compensation tied to plan decisions, related-party transactions, and revenue-sharing arrangements with service providers. Failure to disclose can result in participant lawsuits alleging breach of duty, DOL enforcement actions, and court-ordered disgorgement of profits. In New York federal courts, participants increasingly assert claims based on undisclosed fees and conflicts. Maintain a conflict-of-interest register, document all disclosures in writing, and ensure participants receive plain-language summaries of fees and conflicts before plan enrollment.

SPDs must be furnished within 90 days of plan establishment and at least every five years thereafter; updated SMMs must reach participants within 60 days of any material change. Disclosures must be in writing, in a format participants can reasonably be expected to understand, and available in alternative formats for participants with disabilities. Electronic delivery is permitted if the participant has agreed in writing and has regular access to email or a secure portal. Maintain a distribution log showing dates, recipients, and delivery method for all disclosures; this record becomes essential proof of compliance if the DOL or a participant later challenges timeliness or adequacy.

Plans must establish a written claims procedure allowing participants to submit claims, receive written notification of approval or denial within a specified timeframe (generally 30 to 90 days depending on plan type), and appeal denials with a full and fair review. Claim denials must include a clear explanation of the reason, reference to plan provisions, and notice of appeal rights. A defective claims procedure can be grounds for a participant to challenge a denial in court. Document all claims received, track approval and denial dates, and ensure denial letters explain the reasoning in plain language and clearly state appeal deadlines and procedures.

Plans should obtain annual fee benchmarking reports from independent consultants comparing plan fees to similar plans and market rates. All fees, including investment management fees, record-keeping charges, and administrative costs, should be itemized and disclosed to participants. Revenue-sharing arrangements where investment managers rebate fees to the plan must be disclosed and evaluated for reasonableness. Fiduciaries who pay above-market fees without documented justification face heightened scrutiny in litigation. Maintain a fee schedule, document the benchmarking process and results, and retain evidence that the investment committee reviewed fees and concluded they were reasonable in light of services rendered.

When the DOL requests plan documents or information, treat it as a formal investigation and respond within the specified timeframe. Do not volunteer information beyond what is requested, and coordinate responses through counsel to preserve privilege. The DOL typically requests plan documents, investment statements, fee agreements, participant records, and minutes of plan committee meetings. Assemble requested documents promptly, review them for accuracy and completeness before submission, and maintain a log of all DOL requests and responses. If the DOL identifies violations, work with counsel to negotiate a corrective action plan that addresses the findings and demonstrates good-faith compliance going forward.

A practical annual compliance checklist should include: (1) review and update the plan document to reflect regulatory changes and plan amendments; (2) prepare and distribute the SPD and any SMMs to all participants; (3) conduct a fiduciary review meeting, document investment performance and fees, and evaluate service providers; (4) reconcile participant records to payroll and audit a sample of benefit calculations; (5) review and update beneficiary designation forms; (6) obtain updated fee benchmarking reports; (7) file Form 5500 with the DOL if the plan has 100 or more participants; and (8) review claims procedures and appeal outcomes to identify systemic issues. Assign responsibility for each item, document completion, and retain evidence in a central compliance file.

ERISA compliance is an ongoing obligation that demands structured governance, transparent communication, and documented fiduciary decision-making. Plan sponsors and administrators should establish a compliance calendar, assign clear responsibilities, and engage counsel or qualified consultants to review practices annually. Proactive documentation and periodic self-audits protect participant assets, reduce regulatory exposure, and demonstrate good faith if disputes or DOL inquiries arise.