Understanding fiduciary responsibilities and your role in explaining and disseminating plan benefits is key to navigating any inquiry from the Department of Labor. Recent DOL data suggests approximately 70% of retirement plans investigated were required to take some type of corrective action, so it's more important now than ever for plan sponsors to review their processes before the feds request an interview.
Here are 5 tips from a former Senior DOL Investigator for making your way through a Department of Labor inquiry, as well as the Top 12 Questions that are commonly asked during an ERISA Investigation.
12 Questions to Expect:
1. Do you know exactly where all plan documents are and can you make them readily available for inspection upon request?
2. Can you articulate and prove that your plan’s fees are reasonable?
3. Can you articulate and demonstrate a prudent process for selecting and monitoring your plan’s investment menu?
4. Can you articulate and demonstrate your plan’s reasonable standard for the forwarding of employee contributions?
5. Do you understand the differences between investment advice and investment education for participants?
6. Do you know the difference between fiduciary functions and settlor functions as they pertain to your plan?
7. Are you familiar with your fiduciary duties under ERISA Section 404(c)?
8. Is your Summary Plan Description (SPD) current and does it contains all the necessary content required under ERISA?
9. Do you have a process in place to identify and avoid prohibited transactions under ERISA Section 406?
10. Have you identified plan fiduciaries and are you clear about the extent of their fiduciary responsibilities?
11. Do you have formal training on ERISA?
12. Are all service providers hired through a due diligence process?
Also check out my free course, Preparing for Department of Labor Interview for more insider knowledge on the DOL interview process.
These questions were developed in conjunction with former DOL Senior Investigator, David Donaldson owner and manager of ERISA Smart. This information is not meant as specific advice or guidance for your retirement plan. ERISA SMART, Inc. Fiduciary Education, and X Growth Solutions LLC are not fiduciaries in any capacity. The ERISA SMART Investigative Analysis report provides general information and opinions. Seek advice from professionals for specific information that pertains to your situation.