DOL Enforcement of Plan Fiduciaries on the Rise

Fiduciary Liability Compliance
Author

The Department of Labor (DOL) enforcement of retirement plan fiduciaries continued to grow in 2018. We expect to see these increases continue throughout 2019 and beyond. A recent article by Cohen Buckmann P.C. recounts the following statistics:

  • The Department of Labor recovered $1.6 billion in 2018. 
  • There were 1329 civil investigations.
    • 64% resulted in a monetary recovery or corrective action.
    • 111 of these went into litigation.
  • There were 268 criminal investigations.

Often, the general assumption that this DOL enforcement activity is only a direct result of complaints from disgruntled participants/beneficiaries or from the deliberate fraudulent activity of the plan sponsors and executives. Usually, this is not the case. The Cohen Buckmann article identifies common issues often uncovered by the DOL:

  • Prohibited transactions and self-dealing.
  • Failure to maintain an ERISA bond.
  • Imprudent Investments.
  • ESOP startup transactions in which the plan overpays for employer stock.
  • Paying exorbitant fees.
  • Improperly paying employer expenses out of plan assets.
  • Failure to keep track of missing participants.

The DOL’s voluntary compliance program enables plan sponsors to address violations that are self-discovered. As so, plan sponsors should be proactive in reviewing their fiduciary responsibilities to prevent costly implications later. RCM&D retirement plan advisors are available to help plan sponsors complete a self-audit (whether a full scope audit is required or not) to help identify and address the issues identified in the article.  Additionally, our Retirement Services Division provides plan sponsors with an electronic vault that easily stores all plan documents as well as a tracking program that verifies if you meet audit requirements.

If you have any questions about your fiduciary responsibilities or would like to discuss conducting a self-audit, please reach out to a trusted RCM&D advisor today.