One type of letter that we frequently receive from plan sponsors is a Department of Labor investigatory letter, notifying the plan sponsor that the Department of Labor will be investigating the plan. Sometimes it is in the form of a "limited review" and other times, a full scope investigation. Regardless of the scope of the investigation, here are a few things that you, the plan sponsor, need to know:

1. There is a reason for the investigation. DOL investigations can be triggered from participant complaints or data reported on the Form 5500. There are also several "projects" that the DOL has been investigating such as: (i) the Consultant and Advisor Project which looks at undisclosed and indirect fees; (ii) the Health Benefits Project which looks at whether group health plans are complying with Health Care Reform; and (iii) the ESOP Project which looks at whether participants are getting the benefits they are promised. Further, if you have been or are being audited by the Internal Revenue Service, the IRS may refer a particular issue that is discovered during the audit to the DOL.

While a DOL investigator is unlikely to disclose to you exactly why the plan is being investigated, knowing what an investigator will likely focus on will help you identify and preemptively resolve a potential issue. In my experience, a DOL investigation can be a less stressful experience if you voluntarily disclose plan issues to the investigator rather than the other way around. 

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