The Department of Labor has a new focus on "major cases," such as fee disclosure.
"We're asking for more information" regarding fee disclosure, said Jeff Hinman, deputy director of DOL's criminal enforcement.
Both Hinman and ERISA attorney Bruce Ashton, a partner with Drinker Biddle & Reath, gave attendees at the American Society of Pension Professionals and Actuaries annual meeting in National Harbor, Md., just outside Washington, a detailed description on Monday of how they should prepare for a DOL investigation. They answered such questions as: What triggers a Department of Labor investigation? What will DOL ask for during one? And how should retirement planning officials handle such investigations?
Ashton told retirement planning officials that while they tend to view Employee Retirement Income Security Act violations as a "civil matter, … Jeff's presence here is the signal that there are criminal aspects of ERISA, and they can't be ignored."
Criminal investigations usually involve issues where there is a "badge of fraud, concealment, false statement, or lack of authorization," Hinman added, and that these types of criminal acts can occur in any type of ERISA violation.
When the DOL initiates an investigation, Hinman said, "we usually can't tell you what we are looking for but you'll get an idea by the information we are requesting."
Warned Ashton: "You have to cooperate with a DOL investigation. You have to turn over documents."
Following are the top triggers of a DOL investigation, what DOL is looking for, the investigation process and how retirement planning officials should handle an investigation.
The most common trigger of a DOL investigation is participant complaints. Others include Form 5500 reports that raise questions, bankruptcy, unfavorable media coverage, and referrals from other agencies, particularly the IRS.
"Most of our cases begin with participants calling in" because they are not happy with some issue, Hinman said.
