Los Angeles partner Bruce Ashton was quoted in a PLANSPONSOR article, titled, “Feeling the Heat,” which discussed navigating the Department of Labor’s audit process. In 2013, violations were found in nearly three-quarters of all closed retirement plan audit investigations. The total cost in settlements for plan-related criminal cases and violations was $1.7 billion in plan reimbursements and fines last year alone.
Bruce stated that “those numbers contain a clear message for plan fiduciaries and financial advisers working with retirement plans: The best way to survive a plan audit unscathed is to avoid an audit in the first place. And once an audit is triggered, only the most carefully governed plans expect a clean bill of health.”
“In my time as a practicing attorney, I’ve rarely, if ever, seen a client avoid a plan audit once it has been identified as a possible target by the DOL,” said Bruce.
Lastly, Bruce noted that “sometimes investigators make mistakes. Don’t just enter a settlement, because there are extra penalties involved with a settlement. Very often, we send a letter back that says we disagree wholeheartedly with your conclusion, but nevertheless we [have] put $5,000 back into the plan voluntarily, or whatever amount the DOL is pursuing. We make it clear that we’re not settling with the DOL and triggering additional penalties. Be very careful about not settling.”