Erik Daley, CFA
The Department of Labor has the difficult job of administering and enforcing Title I of the Employee Retirement Income Security Act (ERISA). Title I establishes the standards for governing the operation of employee benefit plans. One of the mechanisms they use in meeting their objectives are audits of retirement plan sponsors. These audits provide the Department a wide variety of data to analyze, but also provide plan sponsors insight into the issues that the Department is most interested in evaluating.
Audits typically arise as a result in one of three ways.
Frequently, plan sponsors want a satisfactory answer to the question, “why me?” However, the “why” is less important than ensuring the sponsor’s responses to Department’s inquiries are addressed completely and accurately. And while each audit may generate questions specific to the audit being conducted, there are a number of questions that come up on a recurring basis providing a good opportunity for plans to “self-audit” their compliance and record retention practices.
In a recent Department compliance audit, the process was initiated with a letter and request for responses to 58 questions from topics covering:
Many plan sponsors find it useful or essential to retain assistance in managing a Department audit. But whether you solicit assistance or go it alone, reviewing some of the questions asked by the Department and evaluating your ability to answer them completely, is a good preparatory step. Attached is a list of the 58 questions referenced above.
If terminology is outside of your area of expertise, or finding answers to technical questions is difficult, conducting additional training and establishing control processes will prove useful. For more information on fiduciary duties under the Employee Retirement Income Security Act, please see Multnomah Group’s Fiduciary Responsibility Guide.
Multnomah Group, Inc.
Phone: (888) 559-0159
Fax: (800) 997-3010