Sometimes it comes in the mail, sometimes by phone: the unexpected notification that the Employee Benefits Security Administration is going to investigate whether a plan sponsor is in compliance with Title I of ERISA.
With more than 300 investigators in 10 regional offices nationwide — and nine specific areas of focus — it's bound to happen sometime. And when it does, according to an article from the Groom Law Group, it helps to know what to expect.
- The initial notice usually arrives with a list of documents the investigator will want to look at. It helps to get the requested documents to the investigator ahead of time, rather than waiting until he or she arrives in the office. It's less disruptive and it's easier to keep track of the information provided.
- The request may also seek information from the sponsor's service providers (recordkeepers, TPAs, advisors), which may involve client confidentiality issues. It's important to resolve these issues ahead of time.
- Since gathering documents can be time-consuming, it helps to communicate with the investigator early to see if the scope of the investigation might be narrowed or the information prioritized.
- EBSA investigators have the authority to interview people they think have the information they need. Though they're instructed to be polite and non-confrontational, it is permitted for the sponsor to have an attorney present if a civil case is involved.
- The investigation concludes with a letter. If EBSA finds nothing amiss with the plan, the letter will say so. It may, however, be a "voluntary correction" letter that highlights violations invites the plan sponsor to correct them. Prompt response to the letter is recommended to avoid sanctions.
- Some violations may be referred to the Internal Revenue Service if taxes are involved. Potential criminal violations are referred to DOL solicitor's office or other entities.
Bottom line: Know what to expect even before you get the notice, comply promptly when you get it, and be well prepared.
Continue Reading for Free
Register and gain access to:
- Breaking benefits news and analysis, on-site and via our newsletters and custom alerts
- Educational webcasts, white papers, and ebooks from industry thought leaders
- Critical converage of the property casualty insurance and financial advisory markets on our other ALM sites, PropertyCasualty360 and ThinkAdvisor
Already have an account? Sign In Now
© 2024 ALM Global, LLC, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to [email protected]. For more information visit Asset & Logo Licensing.
