DoL Problems

Back in 2021 we terminated our service to a Plan because (1) they were not paying our bills, and (2) they were not responding to our call, emails and letters.  Apparently, in 2022 this client did something improper with participant accounts, and they also issue erroneous W-2 Forms for 2021 and 2022.  Back in 2024 the DoL contacted us on behalf of several participants who were not properly paid benefits due.  We sent the DoL our complete file on the last year (2021) that we serviced the Plan.  We even included a copy of our service agreement with this client that in addition to services we provided, it also defined that provision of data was the client's responsibility.  It further went on to define our role as not being a fiduciary since we are not the Sponsor, Administrator, Trustee, Custodian, etc...  Our role was specifically defined to be purely ministerial in that we reconciled operations based upon data submitted.  It was also stated that we have no authority on any issue of the Plan.  After much discussion it was agreed that we are not responsible for items like W-2 Forms!  Fast forward to the present, the DoL is contacting us again since they think we can do something about the Plan's operation.  Again, after detailed discussion it was agreed that our role does not process the client's payroll (like duh).  It was also stated that the only reason the DoL is calling us is because no one else will answer their phone calls!  We, on the other hand, answer our phones.  The agent assigned to the case actually stated that she agrees that we are not the party they should be calling!  But they are calling us because WE ANSWER THE PHONE.  Now they want to do a conference call to discuss how WE MIGHT BE ABLE TO CORRECT THE ERRORS THAT OCCURRED AFTER OUR SERVICE ENDED!  The fact that we don't have any responsibility (per the agent), and we have no access to any data, are being ignored!  Has anyone else been in a situation like this?  Any words of wisdom are greatly appreciate.  Unfortunately, they insisted I do a conference call with the agent and her supervisor tomorrow, even though as agreed to by the agent, we have no responsibility or even ability to address problem related to operations after our service ended.  If there some "bill of rights" related to situations like this?

What Lou most excellently said. 

In responding to EBSA inquiries, a recordkeeper or third-party administrator wants to be clear, yet tactful.

If, after a good explanation, an examiner persists (inaptly), consider: “I’d really prefer not to need to call your supervisor, but . . . .” But don’t do that if you guess the supervisor might be behind the repeated inquiry.

If other efforts fail, lawyer-up. Clients of lawyers I referred have told me that EBSA’s conduct got much better after a lawyer was on the scene. Sometimes, a lawyer’s mere mention that she represents the TPA ended all inquiries.

While not budging from reminding an inquirer about what a nonfiduciary service provider must not do, it sometimes helps to show a little empathy. A tiny handful of EBSA people are fighting a vast scourge of thefts and abandonments.

This is not advice to anyone.

I'll take a slightly different approach.  

DOL can't force you to work on a plan you are no longer engaged to work on. 

DOL can ask you questions about a prior client and the work you did for them (I'm assuming there is no attorney-client privilege here). 

It sounds like they are trying to gather as much information as possible to be able to assist the participants in some way.  I would meet with them and be as helpful as possible without agreeing to do any additional work.  It also wont hurt to contact your friendly neighborhood ERISA attorney.

What is notable about this situation is the relative informal approach the DOL is taking.  It seems as if they are going out of their way to avoid opening an investigation of the plan.  Here is a well-done article the provides an in-depth description of what can be involved in an investigation:

https://www.groom.com/wp-content/uploads/2022/12/Guide-to-Dealing-with-Department-of-Labor-Investigations-of-Retirement-Plans.pdf

Regarding the circumstances in this posting, the guide clearly states on the first page:

"The DOL does not have the authority to compel the plan or any service provider to create materials or analyze issues on the DOL’s behalf."

The guide also notes that:

"The DOL has broad authority under the statute to:

•  Require the submission of reports, books, and records of the plan.
• Enter places to inspect books and records.
• Question persons deemed necessary to determine the facts relative to an investigation."

Given this authority, it begs the question in this case why, after all other attempts to contact the plan fiduciaries, hasn't the DOL sent an agent to the plan sponsor's (or any other fiduciary's) last known physical address?

They DOL loves to harp about finding missing participants.  They may wish, in this case, to try to find a plan sponsor that is MIA,

Is it possible that the DOL could hire the old TPA to do clean up work that would be easier for them to farm out? Does this happen and does anyone know how well DOL pays?

Whether it’s an investigation or an inquiry, a service provider ordinarily cooperates, including furnishing records, to the extent that doing so does not breach one’s service agreement.

An interviewee should avoid unnecessarily saying anything that could suggest the service provider ever did, or had any power to do, anything discretionary.

Although EBSA also presents information requests and before-enforcement demands to plan fiduciaries, EBSA often turns to service providers. The reasons are many, including:

EBSA can’t find a fiduciary.
A fiduciary does not respond, and EBSA lacks resources to compel a response.
A fiduciary asserts that she is not, and never was, a fiduciary, and EBSA prefers not to spend resources fighting the denying fiduciary.
A fiduciary did not keep records.
A fiduciary no longer has access to records.
A fiduciary’s records were discarded. (This often happens with a failing business.)
EBSA seeks a distinct source of information because EBSA suspects a target fiduciary’s information is false.

I had something similar a couple of years ago.  DOL contacted me for a client that we stopped working on ~20 years ago.  The plan sponsor gave them my number, saying that we were their "plan administrator".  And since that was what the DOL had us as in their records now, they were very very very reluctant to accept that we had nothing to do with anything for the past two decades.  They finally left me alone when I was able to dig up an allocation report from 2002 (!) and swore on a stack of 410b tests that was the most recent information I had from right before they fired us, but it was several calls over several months with "Find anything else yet?  You know you are the Plan Administrator..."  Um, no, and goodbye.

My go to phrase:  "We are a nondiscretionary, directed, ministerial service provider.  Go find a fiduciary."

Perhaps after March 14, a furloughed EBSA employee won't ask anything.