EBSA Organizational Chart

Transcription

1 What to Expect from a DOL - Employee Benefits Security Administration (EBSA) Investigation October 17, 2012 EBSA Organizational Chart Assistant Secretary Deputy Assistant Secretary for Program Operations Office of Exemption Determinations Office of Health Plan Standards and Compliance Assistance Office of Technology and Information Services Office of Enforcement Office of Regulations and Interpretations Office of Participant Assistance Deputy Assistant Secretary Regional Offices Boston Chicago New York Kansas City Philadelphia Dallas Atlanta Los Angeles Cincinnati San Francisco Office of Policy and Research Office of the Chief Accountant Office of Program Planning Evaluation and Management 1

2 EBSA Field Offices Regional Offices District Offices EBSA s Mission Statement The Employee Benefits Security Administration protects the security of the retirement, health and other workplace related benefits of American workers and their families. The Agency accomplishes this by: developing effective regulations assisting and educating workers, plan sponsors, fiduciaries and service providers vigorously enforcing the law 4 2

3 Types of Investigations Civil Focus is on Plan Administrators, Trustees, and other fiduciaries who may have violated ERISA. Criminal Focus is on anyone (fiduciaries, service providers, participants) who may have committed fraud against the plan or embezzled plan assets 5 Sources of Cases Participant complaints Form 5500 Reviews Referrals from other agencies Media Other 6 3

4 Civil Plan Investigations Start with phone call from Investigator / Auditor Followed by confirmation letter Date & time of visit Plan(s) to be reviewed Records / documents needed Varies depending on issue 7 Basic Documents Plan Document/ Trust Agreement Form 5500 filings Summary Annual Report (SAR) Summary Plan Description (SPD) Fidelity Bond Investment Statements Service Provider Contracts Meeting Minutes Benefit Statements Records of Expenses Paid Payroll/contribution records 8 4

5 How to Respond to a Document Request You know how your documents are organized; EBSA doesn t The original request will be overbroad You can call and negotiate a reasonable production schedule If EBSA doesn t think you are stalling Or withholding relevant documents 9 Onsite Investigative Work Interviews with key personnel and plan fiduciaries Review of Plan records Basic operations / services Contributions Benefit payments Expenses Investments Selection/Monitoring of Service Providers 10 5

6 Interviews You control who is interviewed to the extent the company will be bound by the interviewee s statements Anyone interviewed may have a lawyer present The company can provide the lawyer if the interviewee agrees to be represented by him/her 11 Review of Plan Records You should control the flow of records Keep the investigator comfortable (but not too comfortable) and don t allow him/her to roam the offices Designate who the investigator can speak to and who will provide documents 12 6

7 What They are Looking For A basic understanding of the Plan Proof of the existence of all Plan Documents and required disclosures Detailed information on Contributions Expenses Service providers Investments 13 Employee Contributions Basic Rule As soon as they can be reasonably segregated from Employer s general assets contributions must be forwarded to the vendor Will be compared to FICA and other withholdings 7-day Safe Harbor Reg. for plans with fewer than 100 participants 14 7

8 ERISA Basic Requirements Reporting Requirements Annual Report (Form 5500) Disclosure Requirements Summary Plan Description (SPD) Summary of Material Modifications (SMM) Summary Annual Reports (SAR) Participant Benefit Statements Blackout Notice, if applicable Provide Documents upon request Fidelity Bond 15 National Enforcement Projects (FY 12) Contributory Plans Criminal Project (CPCP) Rapid ERISA Action Team (REACT) Employee Stock Ownership Plans (ESOPs) Consultant/Advisor Project (CAP) Health Benefits Security Project (HBSP) 16 8

9 Concluding the Civil Investigation If no problems are noted, closing letter If violations are identified, EBSA issues a notice letter requesting voluntary correction If corrective action is not taken, the case may be referred to the Office of the Solicitor for litigation 17 Correct Before You are Required To Determine what EBSA is looking for If something is wrong, fix it immediately Self-correction will avoid 20% civil penalty Fiduciary or service provider removal Injunctive relief A lot of grief 18 9

10 Needing Correction Depending upon the circumstances, EBSA may seek Correction of prohibited transactions Restoration of losses Penalties Removal of fiduciaries Removal of service providers Appointment of independent fiduciary Implementation of new internal controls Supplemental distributions to Ps & Bs Final accounting 19 IRS Referrals IRS Coordination Agreement and Statute requires: referral of prohibited transactions to IRS IRC 4975 excise tax (tax qualified pension plans) referral of potential issues affecting tax qualified status 20 10

11 Criminal Referrals Under some circumstances, criminal referrals may be made to state or federal prosecutors for Theft / embezzlement Kickbacks / bribes False statements to investigators Willful failures to file / false filings Health care fraud 21 Voluntary Fiduciary Correction Program Effective May 19,

12 What is the VFC Program? Allows Plan Officials to correct certain violations before DOL investigates and if done properly, receive a No- Action letter from the Department. DOL NO ACTION You fixed it DOL 23 Features of VFC Program A voluntary self-help program Submit application after correction is made Must not already be under investigation Must be one of 19 eligible transactions (not criminal) Avoid DOL investigation, litigation Avoid ERISA 502(l) penalty Some transactions eligible for IRC 4975 excise tax relief 24 12

13 For Further Information EBSA website: EFAST website: Publications: Technical Assistance (Toll-free number): EFAST Hotline (Toll-free number): (Go EFAST) 25 Questions? Sherwin Kaplan Nixon Peabody LLP th Street NW Washington, DC (202) Skaplan@nixonpeabody.com 26 13