If you are like most 401(k) or pension plan administrators, you
have procedures for participants to request plan documents and
forms. They may be as simple as requiring document requests to be
sent in writing to a designated employee.
Section 104(b)(4) of ERISA requires that certain plan documents,
including summary plan descriptions and 5500's, be provided to
participants upon request. Failing to comply could result in a $110
per day penalty if a participant does not receive a requested
document within 30 days and the plan administrator has no
reasonable cause for the delay. But a recent case indicates that
your exposure could be even broader.
Case in Point: In
Kujanek v. Houston Poly Bag Ltd, the Court of Appeals for the
Fifth Circuit required a profit sharing administrator who had not
responded to requests for documents and distribution/rollover forms
to make up almost $184,000 in account losses incurred by the
participant while his distribution was delayed.
