Tag Archives: plan committee

Things I Worry About (8): DOL Investigations and Unsuspecting Plan Sponsors (2)


best practices, DOL, fiduciary
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Key Takeaways

  • The Employee Benefit Security Administration (EBSA) of the US Department of Labor (DOL) recently released its Fact Sheet: EBSA Restores Nearly $1.4 Billion to Employee Benefit Plans, Participants, and Beneficiaries: ebsa-monetary-recoveries.pdf
  • One of the targets of their investigation is “missing participants”. The DOL refers to that program as the “Terminated Vested Participant Benefits Payments”. Impressively, the EBSA recovered $429,200,000 for participants under that program in the 2023-2024 fiscal year.
  • Plan sponsors/fiduciaries and their advisors would be well-advised to determine whether they have “missing participants” and, if so, take steps outlined by the DOL to address the issue.

As explained in my last post, Things I Worry About (7), the DOL’s EBSA has a number of programs that can restore benefits to plans and participants. Those include:

  • Civil investigations.
  • Criminal investigations.
  • Informal complaint resolutions.
  • Correction programs.

The issue of “missing participants” comes up in civil investigations. In those investigations the DOL examines whether a plan has former employees who left their accounts in the plan and whether the plan continues to provide the legally required disclosures and to ensure that the participants are aware of their benefits. I put “missing participants” in quotes because the definition I broader than it appears. There isn’t a legal definition, but the practical definition is that it is a former employee who left the employment of a plan sponsor, but did not take a distribution of his or her benefits. If plan communications (e.g., emails, mail, disclosures) are sent to a former employee who has benefits in the plan and it appears that the communications were received, the former employee is not “missing.” But, if the emails and mailings are kicked back as undeliverable, the participant is missing.

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Things I Worry About (7): DOL Investigations and Unsuspecting Plan Sponsors


DOL, fiduciary
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Key Takeaways

  • The Employee Benefit Security Administration (EBSA) of the US Department of Labor (DOL) recently released its Fact Sheet: EBSA Restores Nearly $1.4 Billion to Employee Benefit Plans, Participants, and Beneficiaries: ebsa-monetary-recoveries.pdf
  • The Fact Sheet describes the different EBSA programs that can recover money for participants, and the numbers are impressive.
  • However, the Fact Sheet also has specific lessons for plan sponsors, fiduciaries and advisors.

The DOL’s EBSA has a number of programs that can restore benefits to plans and participants. Those include:

  • Civil investigations.
  • Criminal investigations.
  • Informal compliant resolutions.
  • Correction programs.

Civil investigations is the program that most concerns plan sponsors; however, criminal investigations are the most dramatic and can most severely impact the lives of “bad actors.” Last year the EBSA’s criminal investigation resulted in 161 guilty pleas or convictions. The bad acts go far beyond any mistakes that plan sponsors or fiduciaries could reasonably make. Think in terms of embezzlement and theft.

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Best Practices for Plan Sponsors #12


401(k), 403(b), fiduciary, recordkeeper
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Lessons Learned from Litigation (#5)—The Johns Hopkins Case

This is the twelfth in a series of articles about Best Practices for Plan Sponsors. To be clear, “best practices” are not the same as legal requirements. Instead, they are about better ways to manage retirement plans. In many cases, though, “best practices” also are good risk management tools because they should exceed legal standards, address areas of concern, or anticipate future developments as retirement plans and expectations evolve.

Plan sponsors should be aware of the latest trends in fiduciary litigation to help manage the risk of being sued and, if sued, the risk of being liable. In my past four plan sponsor posts, Best Practices for Plan Sponsors #8, #9, #10 and #11, I discussed the lessons learned from the conditions in the settlement agreements for the Anthem, Vanderbilt, BB&T and ABB cases. This article—about the Johns Hopkins settlement agreement—is another example of the importance of using appropriate share classes and the monitoring of compensation of service providers . . . and more.

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Best Practices for Plan Sponsors #11


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Lessons Learned from Litigation (#4)—The ABB Case

This is the eleventh in a series of articles about Best Practices for Plan Sponsors. To be clear, “best practices” are not the same as legal requirements. Instead, they are about better ways to manage retirement plans. In many cases, though, “best practices” also are good risk management tools because they should exceed legal standards, address areas of concern, or anticipate future developments as retirement plans and expectations evolve.

Plan sponsors should be aware of the latest trends in fiduciary litigation to help manage the risk of being sued and, if sued, the risk of being liable. In my past three plan sponsor posts, Best Practices for Plan Sponsors #8, #9, and #10, I discussed the lessons learned from the conditions in the settlement agreements for the Anthem, Vanderbilt and BB&T cases. This article—about the ABB settlement agreement—is another example of the importance of using appropriate share classes and the  monitoring of compensation of service providers . . . and more.

Continue reading Best Practices for Plan Sponsors #11 →

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