Los Angeles partner Heather Abrigo wrote a document update for 401(k) Advisor titled “Department of Labor Investigations: Subpoena Authority.” Heather states that Department of Labor (DOL) retirement plan investigations are increasing in scope and frequency, and discusses the DOL’s broad investigative authority and a service provider’s involvement when an investigation is initiated.
Heather notes that the DOL may issue subpoenas to the plan, plan fiduciaries and/or plan service providers if they do not receive requested information from plan sponsors. “If the subpoena is not complied with, the DOL can use a myriad of enforcement tools,” Heather writes. “This may include litigation and many times will include fines and penalties for noncompliance. It will also result in the investigation being referred to the Solicitor’s Office for civil litigation and can include the assessment of civil penalties.”
She states that service providers should consult with counsel before speaking with or producing documents to the DOL, noting that communication between the service provider and plan sponsor is not protected by any privilege and can be discoverable by the DOL. She also highlights the potential for liability if the service provider is also a co-fiduciary or has become a functional fiduciary based on the services provided.