Initially received SPD for plan, later received the Adoption Agreement. In reviewing we found several discrepancies between the two documents. Do we need to submit a Material Modification to DOL? Are there any other problems this could cause?

Obviously, they should match. Doing an SMM or restating an SPD would seem to be the most obvious course of action. You no longer have to file SMMs (or SPDs) with DOL.

Yes, we fully intend to restate the SPD. My concern was if the Plan Sponsor/Administrator was using the SPD versus the Adoption Agreement that there could be an operational defect requiring correction through voluntary compliance programs. All of this could be a mute point as we are having the client adopt our document. Thanks for the input.

If the person doing the plan administration, not the ERISA Plan Administrator, has been using the SPD and not the actual document, which in this case would be the Adoption Agreement and Prototype, he or she should be fired immediately.