Aggressive DOL auditor wants to reject accountants audit

[SheilaD]

Deleted because client objected to information being posted.

Thank you anyway.

S.

[Andy the Actuary]

So, let them lower benefits. "I'm not an attorney but" can you satisfy DOL by agreeing and then executing a new amendment that retroactively removes freeze clause and provides the desired benefit? Since there are no HCEs, there would be no discrimination issues and benefits would be restored.

[JohnCheek]

" If they do not the DOL will reject the audit (I'm not sure what the consequences of that are). "

The consequences of DOL rejecting the audit: The 5500 will be treated as not having been filed, leading to an annual penalty of $30,000, for each year. IF 2004 were rejected, for example, the penalty could be 30k for not filing 2004 in 2004, and $30k in 04, and in 06, and in 07, etc. DOL would probably then reject 2005, with $30k penalty in 05, and again in 06, and in 07, etc... Could add up to millions pretty quickly.

[Mike Preston]

I don't think the $30,000 pyramids. Small comfort, though.

Whoever is doing this at the DOL should be referred to their supervisor, as this sort of behavior is not at all consistent with the DOL's usual stance. Something else must be going on that we are not aware of.