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EBSA Investigations: 7 Things to Know

The Department of Labor’s Employee Benefits Security Administration (EBSA) is responsible for overseeing millions of employee benefit plans, including investigating retirement plans when necessary. A recent blog entry examines what an employer should know about that.

In Thompson Coburn LLP’s blog entry “Seven Things Employers Should Know About EBSA Investigations,” Lori Jones, Chair of the firm’s Employee Benefits practice, discusses seven things she argues an employer should know about EBSA investigations.

They are not random. While an investigation can result from participant complaints, they also can happen because of the type of plan or because a of a particular plan feature. Jones says that there are four common triggers:

  1. Participant complaints
  2. Form 5500 responses
  3. Referrals from service providers
  4. EBSA targeting initiatives

Focus of the investigation. EBSA does not identify the focus of the investigation in initial contact, Jones says; she suggests that it is best not to raise issues and speculate in the presence of an auditor.

Documents. In the initial notice from EBSA, Jones says, it will make an extensive request for documents related to plan governance, fiduciary obligations and plan administration.

Not a deposition. An onsite visit by an EBSA investigator is not a formal deposition, Jones notes; there is no recording nor is an oath required. However, a recorder will be present, and an interviewee may have legal counsel present.

Protracted period. A considerable amount of time can elapse in communication and contact between an investigator and a plan’s representatives. “Be prepared to hurry up and wait,” Jones writes.

Closing letter. All closing letters are not the same, Jones says. It is possible that one may result in:

  • a referral for litigation;
  • a recommendation for voluntary compliance;
  • a finding that some corrections are needed, but with no formal EBSA action forthcoming; or
  • a letter reporting that EBSA has found nothing.

‘Honey’ helps. Cooperation with EBSA can be a very good thing, Jones suggests, writing that it may make the difference between a “no action” letter and penalties.