Los Angeles partner Bruce Ashton was quoted in a ThinkAdvisor article titled, “DOL Focusing on Major Cases, Particularly Fee Disclosure.”
The article reported from Bruce’s presentation to attendees at the American Society of Pension Professionals and Actuaries’ annual meeting on how they should prepare for a DOL investigation.
Bruce presented alongside Jeff Hinman, deputy director of DOL’s criminal enforcement.
Bruce and Jeff answered such questions as: What triggers a Department of Labor investigation? What will DOL ask for during one? And how should retirement planning officials handle such investigations?
Bruce told retirement planning officials that while they tend to view Employee Retirement Income Security Act violations as a civil matter, “Jeff’s presence here is the signal that there are criminal aspects of ERISA, and they can’t be ignored.”
Bruce warned, “You have to cooperate with a DOL investigation. You have to turn over documents.”
The most common trigger of a DOL investigation is participant complaints. Others include Form 5500 reports that raise questions, bankruptcy, unfavorable media coverage, and referrals from other agencies, particularly the IRS.
The DOL is looking for violations such as, untimely deposits of employee deferrals; improper payment or allocation of payments; failures to follow plan’s Investment Policy Statement; and self-dealing by employer or other fiduciaries.
Bruce outlined the three steps of the DOL investigation: “fact finding and request for information; review and analysis and initial findings by the investigator; and findings and negotiation, in which DOL issues an initial findings letter and requests voluntary correction, which requires a response and action.”
To view the entire article in Think Advisor, click here.