Tuesday, October 29, 2013

Knock-Knock...Who's There? The DOL! Are You Prepared For A DOL Investigation?

By Erica N. CordovaHR Esquire – The Cordova Law Firm LLC

Through its enforcement of the Employee Retirement Income Security Act (ERISA), the Employee Benefits Security Administration (EBSA) is responsible for ensuring the integrity of the private employee benefit plan system in the United States. EBSA's oversight authority extends to nearly 707,000 retirement plans, approximately 2.3 million health plans, and a similar number of other welfare benefit plans, such as those providing life or disability insurance. These plans cover about 141 million workers and their dependents and include assets of over $7.1 trillion (as of March 31, 2013). Source

In fiscal year 2012, the EBSA closed 3,566 civil investigations, with 2,570 (72.1%) resulting in monetary results for plans or other corrective action. In fiscal year 2012, the EBSA achieved over $1.2 billion in monetary results, and EBSA investigations led to the indictment of 117 people for crimes related to employee benefit plans. Source

An EBSA investigation can be triggered by various factors such as an employee/participant complaint or negative press in the media (particularly related to alleged legal activity by the plan sponsor), or the investigation can be completely random. The U.S. Department of Labor (DOL) has recently stepped up its enforcement activities, and they obviously mean business. So, when the DOL comes knocking, you need to be prepared so that the plan sponsor does not get fined for neglecting must-have employee benefit documents.

To be prepared, first you need to understand a few things, such as:
  • Why The EBSA Investigates
  • The Investigation Process
  • What Information Is Requested
  • The Interview Process
  • Closing The Investigation
Bloomberg BNA has developed a brief, but thorough, guide to understanding the DOL investigation process. I would suggest that all plan sponsors, and advisors to plan sponsors read Are You Prepared For A DOL Investigation? Understanding the EBSA Investigation Process, so that you are not blindsided if or when you receive that investigation letter from the DOL. Generally, you have a limited amount of time to respond to the DOL's request for information, so it is best that your time is not wasted in that moment playing catchup.

Erica N. Cordova is the Managing Attorney of HR Esquire - The Cordova Law Firm LLC. At HR Esquire, we believe in passing the savings along to our clients through our part-time law firm model. We strive to help small businesses develop a solid foundation and legal strategy so they can be successful. We will work to improve legal compliance and employee relations. Our goal is to improve your business' performance and provide legal advice for a successful human resources strategy via our Offsite General Counsel. Find out how we can help you and your business today! If you have questions about this article, please email contact@hresquirelaw.com. 

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