PLANSPONSOR - April/May 2021 - 38

FIDUCIARY FORUM
DOL Investigations
What to do if the Department of Labor calls
" W
ho can that be, knocking at my door? " Unfortunately,
it could be the Department of Labor (DOL) initiating
an investigation or checking on an informal
complaint. The level of DOL investigative activity and recovery
was very high last year and is expected to remain high. If it is
the DOL knocking, we don't recommend
responding, " Go away-don't come around
any more, " but we can recommend steps to
help avoid an investigation and tips on how to
handle one if one is initiated.
The DOL is not required to explain why
it has selected a plan for investigation or the
scope of the investigation. However, it may
have been triggered by participant complaints
or Form 5500 information.
Having strong fiduciary processes that
... we don't
recommend
prevent, or detect and correct, common
violations can help plan fiduciaries avoid
such investigations. This requires a vigilant
focus on legal compliance coupled with periodic checks to identify
possible problem areas. Any identified problems should be
corrected voluntarily before DOL enforcement activity materializes.
Doing so can help avoid red flags that may trigger an investigation
and can help in responding to and resolving an investigation
should one be started.
The initial contact from the DOL will likely be a somewhat
responding,
" Go away-
don't come
around any
more " ...
the DOL's area of focus and possible ways to limit the scope of the
request. It may also be necessary to notify the fiduciary insurance
carrier early, as coverage terms often require prompt notification
of possible claims.
It may take some time to gather the materials responsive
to the request. However, it is important that
deadlines not be missed. If more time is
needed, ask the DOL for an extension; you
may offer to send what you can by the original
deadline and request an extension for the
additional materials. Before responding to the
DOL, it is helpful to appoint one person to be
the contact-he will communicate with the
agency and coordinate the defense process,
with outside counsel's assistance.
Any documents provided should be
reviewed with counsel prior to production.
This can help address any problems before
the investigator flags them. Don't try to hide
requested information, but provide only what has been asked for.
With this in mind, you may need to redact information from documents
such as committee minutes.
Following document production, the investigator may ask to
standardized letter advising the plan sponsor of the commencement
of the investigation. The letter will typically explain the
DOL's jurisdiction and powers and include a list of initial documents
being requested. The list is generally quite long and may
include, among other items, plan and trust documents, with their
amendments; ERISA [Employee Retirement Income Security Act]
bond and liability insurance policies; plan financial statements;
participant disclosures and communications; Forms 5500 and
audit reports; committee minutes; payroll documents relating to
employee contributions; and service provider contracts.
When your company receives a DOL investigation letter,
one of your first steps should be to engage the services of ERISA
counsel or a similar adviser experienced in representing clients
in DOL investigations. While we recommend this be done before
responding, it should be handled quickly so you can respond in
a timely fashion. Counsel can help you understand what may be
38 PLANSPONSOR.COM April - May 2021 Art by Joseph Ciardiello
interview various individuals, including committee members. It's
helpful to prepare interviewees so they understand the process
and can answer directly, honestly and succinctly. Counsel should
be present to take notes and understand the focus of the interview.
The review process may often take more than a year, and
may involve periods when there is no word from the DOL. This is
common and should not cause concern. Following the review, the
DOL typically issues a finding or closing letter in which it states its
conclusions about whether there have been any ERISA violations
and provides a short period of time for the plan sponsor to respond
to the findings. Discuss the findings with counsel, as the DOL is
not always correct, or, if it is correct, you'll need to know how to
take action. It's often best to resolve any alleged violations in a
voluntary and informal manner, if possible, rather than through
a settlement that may involve additional penalties.
Summer Conley is a partner in the Los Angeles office of Faegre
Drinker Biddle & Reath LLP. Michael Rosenbaum is a partner in
the firm's Chicago office.
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PLANSPONSOR - April/May 2021

Table of Contents for the Digital Edition of PLANSPONSOR - April/May 2021

Ready Solution?
Tiptop Health Savings Accounts
2021 Defined Benefit Administration Survey: Shedding Light on DB Plans
How TRO Might Benefit Plans
By Popular Demand
What's the ROI?
PLANSPONSOR - April/May 2021 - Cover1
PLANSPONSOR - April/May 2021 - Cover2
PLANSPONSOR - April/May 2021 - 1
PLANSPONSOR - April/May 2021 - 2
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PLANSPONSOR - April/May 2021 - Ready Solution?
PLANSPONSOR - April/May 2021 - 17
PLANSPONSOR - April/May 2021 - 18
PLANSPONSOR - April/May 2021 - 19
PLANSPONSOR - April/May 2021 - 20
PLANSPONSOR - April/May 2021 - 21
PLANSPONSOR - April/May 2021 - Tiptop Health Savings Accounts
PLANSPONSOR - April/May 2021 - 23
PLANSPONSOR - April/May 2021 - 24
PLANSPONSOR - April/May 2021 - 25
PLANSPONSOR - April/May 2021 - 26
PLANSPONSOR - April/May 2021 - 27
PLANSPONSOR - April/May 2021 - 2021 Defined Benefit Administration Survey: Shedding Light on DB Plans
PLANSPONSOR - April/May 2021 - 29
PLANSPONSOR - April/May 2021 - 30
PLANSPONSOR - April/May 2021 - 31
PLANSPONSOR - April/May 2021 - How TRO Might Benefit Plans
PLANSPONSOR - April/May 2021 - 33
PLANSPONSOR - April/May 2021 - By Popular Demand
PLANSPONSOR - April/May 2021 - 35
PLANSPONSOR - April/May 2021 - What's the ROI?
PLANSPONSOR - April/May 2021 - 37
PLANSPONSOR - April/May 2021 - 38
PLANSPONSOR - April/May 2021 - 39
PLANSPONSOR - April/May 2021 - 40
PLANSPONSOR - April/May 2021 - Cover3
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