We have all seen the letters in the mail. Your employer is updating their benefits policies, and by law, you are required to receive notification summarizing the changes. These notices contain a lot of legal jargon and fine print, and you probably threw them away without much more than a cursory glance. Although these updates are often difficult to understand, they can go far in explaining how your benefits are changing, and small changes can add up. How can you stay on top of these changes to ensure your benefits are optimized for the future?
Failing to account for changes in your employer benefits could mean that you lose out on the full value of your plan, putting you in a potentially tough position when you need your benefits the most. You can conduct this check whether you are currently employed, formerly employed or now a retiree anticipating payout.
Changes to your benefits can occur for many reasons, including the passage of new laws related to the Employment Retirement Income Security Act. Employers are also required to file benefits information with various government agencies periodically, which could prompt them to re-examine benefits.
What to look for
The U.S. Department of Labor recommends checking up on your individual benefits statements once every three years. This check should be a thorough inspection of your personal information and benefits to ensure the accuracy of the following:
- Your administrative data including name, address, birthday and years employed.
- Your salary and contribution amounts
- Performance of your investments
- Fees collected for services
- Beneficiary designations
Quarterly statements of your investment performance are already required by law, but by taking an extra step every three years, you can ensure that your long-term benefits covered by ERISA work for you.
How do I conduct these checks?
Checking up on your benefits is often as simple as asking your employer or benefits provider for the information. These updates are usually available in a document called a Summary Plan Description which outlines your rights as a beneficiary and your employer’s obligations as the provider.
When to get an attorney involved
Remember, employers and benefits administrators are required to provide information such as Summary Plan Descriptions and quarterly performance summaries to employees and beneficiaries. Failing to provide this information or retaliating against people who ask for it could signal a breach of fiduciary duty.
