DOL Investigation

[Guest mrilao]

Is there anywhere to look to see the amount of documentation that the DOL may request during an investigation? I ask because they are asking for the owners tax returns and other items that seem beyond Title I of ERISA (plan documents, SPDs, 5500s, etc.). Is there anywhere to start looking at this issue?

[Guest mrilao]

Is there anywhere to look to see the amount of documentation that the DOL may request during an investigation? I ask because they are asking for the owners tax returns and other items that seem beyond Title I of ERISA (plan documents, SPDs, 5500s, etc.). Is there anywhere to start looking at this issue?

[Guest merlin]

There was an excellent session on "Surviving A DOL Audit" by Brad Huss at the ASPPA conference in October. His main point was that DOL audits are not like IRS audits. They are actually called investigations, and their auditors are called investigators. DOL investigations are usually triggered by some sort of complaint or referral by another gov't agency. In short, they are probably looking for something specific. You might want to engage ERISA counsel sooner rather than later, if for no other reason than to try to negotiate limits on the information request.

[GBurns]

Usually there is a letter that gives the nature of the complaint or issue and asks for a rely. The need and scope of the response is what is used to determine what the scope and nature of the investigation will be.

While it is possible to try and limit the scope of this investigation, there is nothing that stops there being an additional investigation into items discovered during the initial investigation. If you think about it, the contributions and testing etc are related to income, eligibility, ADP, HCEs etc. The only way to determine the accuracy of some of this is to go to either the books of accounts or simply use the HCE and owner tax returns, which would be an attested source of the data that would have been developed from the books of accounts. As a result DOL investigations are initially wider than IRS investigations.

You might want to read through the various Field Manuals, here is 1 from EBSA:

http://www.dol.gov/ebsa/OEManual/main.html

[Alf]

The DOL Enforcement Manual used by their auditors is on the DOL website. I would think that you could sucessfully resist disclosure of the owner's tax returns, but I would come up with a reasonable compromise. Do you really want to agitate all of those nice, hansome, under-appreciated, hard-working professionals at the EBSA?

[could be me maybe not]

GBurns, have you experienced a lot of DOL investigations of qualified plans?

Helpful link. use that mrliao.

[Kirk Maldonado]

Alf:

You forgot to mention that they are also under-paid.

[AndyH]

And that they shoot first and ask questions later.

[mbozek]

GB: Testing of Qual plans under 410b eligiblity, discriminaton of benefits in favor of HCEs, ADP, etc are matters which are subject to IRS audit for qualified plans not the DOL under ERISA, which only covers the age and service requirements, vesting and J&S. I dont see the revalance of reviewing an individual tax return to the protection of employee rights under a plan subject to title I of ERISA. To determine if a contribution has been made the DOL will ask for the cancelled check. If the DOL is asking for the owner's tax returns its because they suspect some criminal action such as the owner pocketing salary reduction contributions for which the DOL will have to produce a subpoena. The client needs criminal counsel.

[GBurns]

I have experienced about 6 cases in 14 years.

This thread has nothing to do with "Testing of Qual plans under 410b eligiblity, discriminaton of benefits... ", in fact we do not yet know what it has to do with.

Whether criminal or civil case/action/issue by IRS, DOL or anyone else, a subpoena is usually used because the requested/desired item is not being given voluntarily. That is why the IRS and DOL etc make a Document Request and a wait on a response first. That is the procedure being followed here and is what was outlined in the opening post.

The letter from the DOL introduces the issue, the response from the employer determines the future line of communication, which might or might not need a subpoena. The issues raised by the letter and any other communication is what should be used to determine whether counsel is needed and what sort of counsel.

The authority of the DOL is not restricted to "only covers the age and service requirements" nor is ERISA.

Excerpted from the Manual:

Investigation of Criminal Matters

On February 9, 1975, the Department of Labor and the Department of Justice executed a Memorandum of Understanding which provided for a specific case by case delegation from the Department of Justice regarding criminal investigations of criminal matters relating to employee benefit plans. With the passage of the Comprehensive Crime Control Act of 1984, the Department of Labor has express statutory authority to investigate criminal matters relating to employee benefit plans. Accordingly, the Department of Labor is no longer required to obtain delegation on a case-by-case basis; however, Pension and Welfare Benefits Administration Investigators/Auditors will contact the appropriate United State's Attorney's Office as early as possible in the investigation to determine interest by the U.S. Attorney's Office. See Chapter 52, Criminal Investigations, for Pension and Welfare Benefits Administration policy concerning criminal investigations involving employee benefit plans.

The secretary will either on complaint of an alleged violation or on his/her own motion investigate through his/her own staff all matters that may form the basis for possible criminal action under Section 501 of the Act. These matters include reporting and disclosure provisions under Part 1 of Title I and any regulations issued thereunder.

[Kirk Maldonado]

Fortunately, their aim is often pretty bad.

[GBurns]

That was before the Patriot Act, now they have to protect the homeland and its asses even more.

By the way this question was also posted on another Forum, maybe you might want to enter the fray over there also.

[joel]

Kirk,

That's because they are underpaid.

[david rigby]

That was before the Patriot Act, now they have to protect the homeland and its asses even more.

No doubt this was a typo, but it works just the way it is.

[GBurns]

Freudian slip? What else can I say?

[AndyH]

Kirk, your comment could not be more right on. It is amazing what they focus on and what they miss.