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General Employee Benefits Security Administration investigations.

746. What is the general framework that governs the enforcement resources of the Employee Benefits Security Administration?

The general framework through which the enforcement resources of the Employee Benefits Security Administration (EBSA) are efficiently and effectively focused to achieve its policy and operational objectives is the Strategic Enforcement Plan (StEP), released on April 6, 2000. The StEP identifies and describes the EBSA's enforcement priorities and informs the public of the EBSA's current goals, priorities, and methods. The StEP promotes compliance with Title I of ERISA. The EBSA's enforcement strategy is designed to support the Department of Labor's goal of a secure workforce by deterring and correcting violations of ERISA and related statutes.

The EBSA's enforcement programs are primarily carried out through civil investigations. The civil investigative program is organized by the EBSA using two main approaches: (1) national projects, which are investigative projects that further more broadly established long-range national investigative priorities; and (2) regional projects, which are localized investigative projects undertaken by individual EBSA regional offices. A critical part of EBSA's enforcement program under the Strategic Enforcement Program also includes the prosecution of criminal acts relating to employee benefit plans. Criminal investigations are discussed in detail in Chapter XIII.

747. What are the Employee Benefits Security Administration's National Investigative Priorities?

The Employee Benefits SecurityAdministration (EBSA) establishes priorities in order to ensure that its enforcement program focus on the areas that are critical to the well-being of employee benefit plans. Generally, the EBSA designates and identifies over several years the various types of plans, benefits, or other broad segments of the regulated employee benefit plan universe that will be emphasized under the enforcement program. Within these national investigative priorities, the EBSA annually identifies national investigative projects, to which it dedicates enforcement resources. These national investigative projects are designed to identify and correct the ERISA violations that the EBSA believes may be widespread or to focus upon abusive practices that affect many plans. The StEP identifies the following three current national investigative priorities: (1) plan service providers; (2) health care plans; and (3) defined contribution pension plans.

Plan Service Providers

As discussed in the preceding questions, the DOL defines a "plan service provider" as any person or entity that provides a direct or indirect service to an employee benefit plan for compensation.

The DOL considers third party administrators, accountants, attorneys, and actuaries to be plan service providers.The definition also includes financial institutions such as banks, trust companies, investment management companies, and insurance companies, as well as others that manage or administer (directly or indirectly) funds or property owned by employee benefit plans. The DOL believes that the investigation of plan service providers offers the opportunity to address abusive practices that may affect more than one plan. Thus, by focusing investigative resources on plan service providers, the EBSA can address violations involving many plans.

The focus on service providers as a national investigative priority under the StEP is not new, but a continuation of the DOL's long-standing practice under the ERISA Enforcement Strategy Implementation Plan of 1990 (ESIP). Under the ESIP, the EBSA devoted 50% of EBSA fiduciary investigative time to abusive practices in the areas of welfare plan service providers and financial institutions that provide services to employee benefit plans. By continuing its focus on service providers under the StEP, the EBSA is maintaining its position under the ESIP that service provider investigations generally result in larger recoveries for more plans and more participants, and provide a mechanism whereby the EBSA can leverage its resources and obtain the maximum impact for the benefit of plan participants and beneficiaries.

As under the ESIP, the investigation of service providers generally focuses on the abusive practices committed by the specific service providers rather than on the plans. For example, where a third party administrator has systematically retained an undisclosed fee, the focus of the investigation will be on the third party administrator rather than the plan that contracted for the services. Although the StEP does not mandate that any specific amount of investigative time be devoted to the investigation of service providers, the EBSA is encouraging the field offices to allocate appropriate resources to the targeting and investigation of these issues as a method to leverage its available staffing.

Health Benefit Issues

The DOL estimates that there are a total of 2.6 million ERISA-covered health plans that cover approximately 122 million participants and beneficiaries. In the view of the DOL, several factors have combined in recent years to make the management and administration of ERISA-covered health plans a matter of vital national importance, including: increased health care costs (due in part to improved technology and accessibility); changes in the health care delivery and funding systems; and the evolution of the legal standard under which health plans and their service providers must operate. Additionally, as the cost of health care has increased, the methods for delivering that care have changed. Further, the DOL generally regards the increase in health care costs to be a key factor in the move toward managed care, the stated purpose of which is to control access to health care and its related costs.

Under the StEP, the EBSA seeks to ensure that the benefits of participants and beneficiaries under welfare plans are protected. The application of available remedies under ERISA is critical in those cases where federal preemption leaves participants with no other effective statutory or common law cause of action. The EBSA seeks to apply the full extent of ERISA's remedies and to promote a legal standard that will increase the availability of appropriate remedies to protect welfare plan participants and beneficiaries.

Because the EBSA views health benefits as critically important, in recent years it has applied substantial resources to addressing abusive practices that violate ERISA. For example, the EBSA has pursued enforcement actions involving multiple employer welfare arrangements (MEWAs), and insurers and service providers that receive hidden discounts. Moreover, the EBSA's role in health care has also expanded as a result of the enactment of new legislation, such as the Health Insurance Portability and Accountability Act of 1996 (HIPAA); the Newborns' and Mothers' Health Protection Act of 1996 (NMHPA); the Mental Health Parity Act of 1996 (MHPA); the Women's Health and Cancer Rights Act of 1998 (WHCRA); the Mental Health Parity and Addiction Equity Act of 2008 (MHPAEA); the Genetic Information Nondiscrimination Act of 2008 (GINA); the Health Information Technology for Economic and Clinical Health Act of 2009 (HITECH); and the Children's Health Insurance Program Reauthorization Act of 2009 (CHIPRA). The EBSA is charged with implementing new regulatory and enforcement requirements that are found in these laws. In response to its expanding role in the health care area, the StEP provides that the EBSA will continue to devote substantial enforcement resources to the targeting and investigation of fiduciary issues relating to health benefit plans. The EBSA has also established the Office of Health Plan Standards and Compliance Assistance to develop regulations, interpretive bulletins, opinions, forms, and rulings relating to health care portability, nondiscrimination requirements, and other related health provisions in furtherance of this role.

Defined Contribution Plans

In the StEP, the EBSA has identified defined contribution plans as a national investigative project. In recent years there has been a tremendous growth in 401(k) defined contribution plans in terms of the number of plans, the number of participants, and the amount of assets in these plans. The EBSA has decided that this growth, and the related administrative and investment practices that have developed to accommodate these plans, warrant scrutiny in order to ensure the safety of this large volume of assets. Moreover, because defined contribution plans are not covered by PBGC insurance, plan losses due to a fiduciary breach directly affect plan participants and such losses are irrevocable unless the funds can be recovered through enforcement or other legal actions. Accordingly, the EBSA has identified defined contribution plans as a national enforcement priority because the risk of loss in such plans rests entirely on the plan participants.

748. What are the Employee Benefits Security Administration's National Projects?

According to the StEP, national projects are investigative projects that focus on a selected issue or group of related issues of national scope and significance that fall within the established national enforcement priorities. Generally, a field office of the Employee Benefits Security Administration (EBSA) must give priority to conducting investigations and dedicating appropriate resources to the project during the fiscal year. On occasion, however, national projects may address issues that are not necessarily prevalent in all areas of the country, and then only a selected group of EBSA field offices are required to participate in the project. According to the EBSA, the issues selected for implementation as national projects are determined in annual planning sessions (or reviewed, since an individual national project may extend over more than one fiscal year), including commentary from the EBSA's field offices. National projects may be an expansion of a successful regional project or may arise in connection with field office investigations. Coordination and enforcement policy determinations for national projects are generally directed through the Office of Enforcement (OE), although the field office managers have substantial opportunities to participate and comment. The OE's involvement in national projects includes monitoring and evaluating the project's progression, and, where appropriate, issuing procedural directives and technical guidance.

749. What are some of the national enforcement projects identified by the Employee Benefits Security Administration?

The field offices have been ordered to place particular investigative emphasis upon the following national enforcement projects identified by the Employee Benefits Security Administration (EBSA).

Multiple Employer Welfare Arrangements (MEWAs)

A Multiple Employer Welfare Arrangement (MEWA) is a welfare benefit plan or other arrangement established to benefit the employees of two or more employers. The EBSA has found that small employers may use MEWAs when they are either unable to obtain health care coverage for their employees or cannot afford the cost of such coverage. EBSA investigations continue to reveal instances where MEWAs have failed to pay claims as a result of insufficient funding and inadequate reserves. In the worst situations, MEWAs have been operated by individuals who drained the MEWA's assets through excessive administrative fees or by outright theft. According to the StEP, the EBSA's emphasis is on abusive and fraudulent MEWAs created by unscrupulous promoters, who default on their obligations after promising inexpensive health benefit insurance.

The DOL believes that MEWAs may also be involved in criminal violations.

Administrative Services Only (ASO) Project

This national project involves investigations of insurance companies that provide administrative services only to self-funded welfare plans. These investigations focus on whether fee reductions or discounts obtained from medical service providers have been passed on to the plans or their participants.

401(k) Fees

Although it does not presently appear to be an investigative-type project, the EBSA intends the 401(k) Fees Project to educate both plan participants and plan sponsors about the impact of fees on participants' return on investments. (An in-depth discussion of this subject appears in Chapter IV.) The EBSA developed a consumer information brochure on plan investment fees in support of this project, which is designed to educate participants on important ways to monitor investment fees and to remind plan sponsors of their fiduciary obligations to monitor these fees. The EBSA reports that this investigative project has increased its knowledge of how 401(k) plans monitor and analyze their investment fees (particularly where the fees are paid from plan assets rather than by the plan sponsor), and how fiduciaries oversee the administration of these types of plans.

Orphan Plans

In response to situations where plans have been abandoned by plan sponsors and fiduciaries, or fiduciaries have completely abdicated their responsibilities to administer plans prudently and in the sole interest of the participants, the EBSA began the Orphan Plans project in October 1999. According to the EBSA, the objectives of this project are to: (1) locate orphan plans that have been abandoned by fiduciaries as a result of death, neglect, bankruptcy, or incarceration; (2) determine if the fiduciary is available to make fiduciary decisions, such as the termination of the plan and the distribution of plan assets; (3) require fiduciaries to fulfill their duties, file appropriate compliance forms, and ensure that proper actions are undertaken to protect promised benefits; and, where possible, (4) to identify and penalize plan officials that have not fulfilled their responsibilities to plan participants.

DOL Enforcement Activities on Fees

The DOL's website discussion of National Enforcement Projects states the following: "EBSA's newest National Project will focus on the receipt of improper, undisclosed compensation by pension consultants and other investment advisers. EBSA's investigations will seek to determine whether the receipt of such compensation violates ERISA because the adviser/consultant used its position with a benefit plan to generate additional fees for itself or its affiliates. EBSA may also need to investigate individual plans to address such potential violations as failure to adhere to investment guidelines and improper selection or monitoring of the consultant or adviser. The CAP will also seek to identify potential criminal violations, such as kickbacks or fraud."

This project is coupled with the EBSA's recent Request for Information and Proposed Rule on Fee and Expense Disclosures to Participants in Individual Account Plans. (1)

Both of these items demonstrate that the DOL is stepping up its investigation of plan service providers to identify abusive practices, determine industry trends, and maximize its targeting of plans that may have a high probability of violating the prudence standards of ERISA or plans that could be affected by self-dealing by plan service providers. It is expected that EBSA will continue to increase the number and scope of service provider investigations.

The 401(k) fee standardized disclosure form contains basic information employers may use in calculating and accounting for the total costs of operating a plan. It contains:

c. One-time start up and conversion expenses, and

d. Service provider termination expenses.

The standardized disclosure form is divided into six parts. It contains a discussion on the four general ways in which service provider fees are calculated (asset backed, per-person, transaction based, and flat rate), the disclosure schedules, and a glossary of service provider terms defined. The individual schedules require disclosure of the following information, all of which adds up to total plan expenses:

1. Investment product fees

a. Collective Investment Funds;

b. Insurance/Annuity products;

c. Mutual Funds;

d. Individually Managed Accounts;

e. Brokerage Window; and

f. Other products (specified).

2. Plan administration expenses

a. Administration/Recordkeeping fees

i. Daily valuation;

ii. Payroll processing;

iii. Balance inquiry;

iv. Investment transfer;

v. Contract administration charge;

vi. Distribution processing;

vii. QDRO processing;

viii Participant statements;

ix. Plan sponsor reports;

x. VRU/Internet services; and

xi. Other (specified).

b. Participant Education/Advice

i. Participant education materials/distribution;

ii. Education meetings (frequency);

iii. Investment advice programs; and

iv. Other (specified).

c. Trustee Custodial Services

i. Certified annual trust statement;

ii. Safekeeping of plan assets; and

iii. Other (specified).

d. Compliance Services

i. Nondiscrimination testing;

ii. Signature ready Form 5500;

iii. Annual audit; and

iv. Other (specified).

e. Plan Amendment fee

i. Plan amendment fee;

ii. Plan document/determination letter fee; and

iii. Other (specified).

f. Participant Loan Administration

i. Loan origination fee;

ii. Loan processing fee;

iii. Loan maintenance and repayment tracking fee; and

iv. Other (specified).

3. One-Time Start-Up/Conversion Expenses

i. Start-up conversion education program;

ii. Start-up/conversion enrollment expense;

iii. Installation fee;

iv. Start-up/conversion plan document fee/filing fee; and

v. Other (specified).

4. Service Provider Termination Expenses

a. Investment Product Expenses

i. Contract termination charges;

ii. Back-end load;

iii. Product termination fee; and

iv. Other (specified).

b. Plan Administration Expenses

i. Service provider termination charge;

ii. Service contract termination charge; and

iii. Other (specified).

750. What is the Employee Contributions Project?

Since 1995, the Employee Benefits Security Administration (EBSA) has used the Employee Contributions Project to pursue an aggressive enforcement program that is intended to safeguard employee contributions made to 401(k) plans and health care plans. The EBSA investigates situations in which employers delay depositing employee contributions made to these plans. Pursuant to the revised participant contribution regulations, effective February 3, 1997, employee pension benefit plan contributions become plan assets as soon as they can reasonably be segregated from the employer's general assets, but in no event later than 15 business days after the end of the month in which the contributions are withheld from employees' pay. Employee welfare benefit plan contributions become plan assets as soon as they can reasonably be segregated from the employer's general assets, but in no event later than 90 days after the date when the employer receives them (in the case of amounts that a participant or beneficiary pays to the employer), or the date on which such contributions would otherwise be payable in cash (in the case of amounts withheld by an employer from a participant's wages). The EBSA has determined that in some cases, employers do not promptly deposit the contributions in the appropriate funding vehicle, as required by the regulations. In other cases, the EBSA has found that the employer simply converts the contributions to other uses, such as business expenses. In the EBSA's view, both scenarios may occur when the employer is having fiscal problems and turns to the plan for unlawful financing.

The EBSA has amended the plan asset regulations to provide for a safe-harbor under which participant contributions to a pension or welfare benefit plan with fewer than 100 participants at the beginning of the plan year will be treated as having been made to the plan in accordance with the general rule when contributions are deposited with the plan no later than the seventh business day following the day on which such amount is received by the employer, or the seventh business day on which such amount would otherwise have been payable to the participant in cash. (1) The regulations have been amended to include participant loan repayments under the general provisions and under the safe harbor. (2) These amended regulations will not change the current regulations mandating deposit of the assets by the fifteenth business day of the month following the month in which the assets were withheld from the participants. Rather, it creates a one-week time period in which there is a presumption of compliance for assets deposited to the plan trust by small plans.

751. Are any other enforcement projects aimed at health benefit plans?

In recent years, the Employee Benefits Security Administration (EBSA) has applied substantial enforcement resources to the targeting and investigation of fiduciary violations, as well as criminal violations relating to health benefit plans. The EBSA's role with respect to health plans has also expanded as a result of legislation that increased the regulatory and enforcement requirements to be implemented by the EBSA. These statutes include the Health Insurance Portability and Accountability Act of 1996 (HIPAA), the Mental Health Parity Act of 1996 (MHPA), the Newborns' and Mothers' Health Protection Act of 1996 (Newborns' Act), the Women's Health and Cancer Rights Act of 1998 (WHCRA); the Mental Health Parity and Addiction Equity Act of 2008 (MHPAEA); the Genetic Information Nondiscrimination Act of 2008 (GINA); the Health Information Technology for Economic and Clinical Health Act of 2009 (HITECH); and the Children's Health Insurance Program Reauthorization Act of 2009 (CHIPRA).The EBSA's focus with regard to health plans is primarily to ensure that funded plans are financially sound and that plans are administered prudently and in the participants' sole interest.

752. What are Regional Projects?

Enforcement initiatives are also conducted as projects by individual regional field offices. Each year, the regional field office managers submit their project proposals to the Office of Enforcement (OE) for review and approval. The subjects selected for regional projects are generally topics that have been identified by a particular region as an enforcement issue that may be unique or particularly problematic within its geographic jurisdiction. Because regional field office staff may be able to identify potential issues through their investigative activities, they have the unique opportunity to observe industry practices firsthand and select issues for development as regional projects that may ultimately be appropriate for adoption as national projects.According to the Employee Benefits Security Administration (EBSA), an issue selected as a regional project will normally be:

* Well-defined both in terms of scope and focus (rather than couched in terms of broad categories, such as "small plan issues");

* Identified in the context of a type of transaction or industry practice; or

* An emerging concern or involving a legal position that is precedential in nature.

In addition, a regional project should have the potential to develop an effective targeting method so that an appropriate number of subjects can be identified for investigation. As noted previously, any number of targeting methods may be used. The EBSA considers regional projects that satisfy the criteria listed above to provide a foundation for identifying cutting-edge issues that may ultimately involve matters of national scope and importance. If an issue is subsequently selected as a national project, the EBSA believes that the experience and insight gained at the field office level will provide a substantive basis for guiding other field offices in conducting similar investigations. Some regional projects address practices that are more localized in their scope and impact. Because the demographics of each region differ with respect to the concentrations of various types of plans and service providers, the same strategy may not be effective for all regional field offices.

753. What factors are considered by the Employee Benefits Security Administration in targeting cases?

In developing priorities for meeting the objectives for targeting cases, the Employee Benefits Security Administration (EBSA) considers the following factors:

* Preventing dissipation of plan assets;

* Obtaining restitution on behalf of employee benefit plans;

* Removing harmful individuals from contact with plans, through both civil measures and criminal sanctions;

* Establishing legal precedent for the guidance of the public;

* Enlisting the assistance of others, such as plan accountants, in EBSA enforcement efforts;

* Encouraging private initiatives (as contemplated by ERISA Section 502) by fostering greater awareness by plan participants of their rights and increasing their ability to obtain meaningful information about their plans;

* Assisting the public;

* Promoting legislative and public awareness of EBSA enforcement efforts and seeking legislative and regulatory solutions to enforcement problems; and

* Encouraging inter-agency cooperation. (1)

754. What targeting methods are used in selecting plans for investigations?

The Employee Benefits Security Administration (EBSA) uses the following targeting methods in selecting cases for investigation:

* Plan directories for each area office's jurisdiction, based upon its designated geographical territories, participant size, and asset dollar size;

* Specifically designed Form 5500 computer based targeting reports;

* Comparison of data from the ERISA database to data merged or generated from other databases befitting the criteria under review or investigation (i.e., (1) the Federal Deposit Insurance Corporation (FDIC) database reporting statistical information on financial institutions holding employee benefit trust assets; (2) the Master Trust database maintained by EBSA; (3) the common and collective trusts database; (4) the Office of Labor Management Standards database; and (5) other databases deemed appropriate by EBSA);

* Continued review of significant answers to Form 5500 narrative questions that warrant further inquiry by the appropriate regional office for investigation;

* Targeting techniques to measure whether plan assets are adequately diversified as to decrease the risk of losses to plans using investment strategies;

* Specific "on-line" targeting for special plan characteristics;

* Information from the EBSA's Office of Exemption Determinations and Office of Regulations and Interpretations, such as exemption applications and related comments;

* Complaints of abuse in employee benefit plans received from participants, trustees, and interested third parties;

* Information obtained from other federal and state agencies, including the Office of Inspector General, Federal Bureau of Investigation, and state insurance commissioners; and

* Referrals from the Pension Benefit Guaranty Corporation (PBGC) for consideration for investigation by EBSA of those cases relating to areas of potential exposure for PBGC, such as severely underfunded plans, abandoned plans, and special classes of preferred stock by employers to their plans. (1)

755. How does the Employee Benefits Security Administration target a plan for investigation?

The DOL's Employee Benefits Security Administration (EBSA) has approximately 300 auditors and investigators located within its 10 regional and five district offices. With the amount of private sector benefit plans in the United States numbering in the hundreds of thousands, the DOL, with such a relatively small investigative staff, does not randomly target plans for investigation. Consequently, any plan, sponsor, or service provider identified as a target for investigation has been determined to have a high probability of violating ERISA.

There is one exception to this general rule. Plans may be selected for a limited review under the DOL's national computer targeting program, which targets plans based on the information reported on the Annual Report Form 5500. The DOL's national office periodically sends its regional field offices a list of plans within their respective geographic jurisdictions that meet the current targeting criteria for a limited review. At its discretion, the regional office may send an inquiry letter requesting certain information to the plans listed on the targeting report in order to determine whether any violations exist with respect to the issues targeted. A timely response to the regional office, indicating that no violation exists, is likely to result in a closed case.

DOL field offices primarily use the following sources of information to select a plan, sponsor or service provider for an investigation:

1. Complaints .The DOL may receive information that indicates or alleges that a violation of ERISA has occurred or is about to occur. Complaints may be written or oral and they may be received from individuals, news media, or other governmental agencies. If information in the complaint is indefinite, general, or grounded in rumor or conjecture, an investigation likely will not be conducted. Nevertheless, if a participant complaint indicates and documents ERISA violations that affect a class of participants, the DOL will be interested in investigating. Many of the more egregious civil and criminal violations are brought to the attention of the DOL through participant complaints to the DOL field offices.

2. Issues Identified Through Other Investigations. DOL auditors and investigators are trained to identify and investigate evidence of ERISA violations discovered in investigations of plan service providers. If a service provider is being investigated and the provider's actions have left client plans in violation of ERISA, or if violations exist in the plans regardless of the service provider's actions, the DOL may open investigations of the individual plans. Similarly, if a single plan investigation details an ERISA violation that may involve other plans or service providers, further investigations may result.

3. Other Government Agency Referrals. The DOL shares information with the IRS, Office of Inspector General, and other federal agencies about evidence of violations under their respective jurisdictions discovered in the course of investigations.

4. Field Office Computer Targeting. The DOL field offices currently receive digitally scanned images of Annual Report Forms 5500, attached accountants' opinions, and audited financial statements filed with the IRS. The information reported on the Annual Report Form 5500 is entered into a computer database known as "FEDS," and is distributed to the DOL field offices on electronic media, accessible through their computer network. The system does not have the capability to conduct searches or inquiries using targeted criteria. It can only generate a reproduction of the actual Annual Report Forms 5500, attached accountants' opinions, or audited financial statements. Using FEDS, the DOL targets plans for investigation, based upon Annual Report Forms 5500 contained in its database. The targeting criteria are usually determined by the investigators who conduct searches.

5. Annual Report Form 5500 Review. Some of the DOL regional offices may periodically send a team of investigators and auditors to an IRS regional storage facility to manually select and review the hard copy filings of Annual Report Forms 5500, accountants' opinions, and audited financial statements filed by employee benefit plans within their regional jurisdiction. The DOL team then screens, selects, and copies the documents that indicate potential violations of ERISA, according to their experience and judgment.The copied documents are returned to the regional office and used as targeting sources for potential future investigations.

6. ESIP Targeting Programs. An enforcement strategy implementation plan (ESIP) is periodically undertaken by the DOL, in an effort to allocate limited resources in the most effective manner to achieve and maintain compliance with ERISA. The 1990 ESIP directs the DOL to allocate 50% of its investigative resources to investigations of "significant issues": specific areas that have the highest potential for abuse. The objectives of the ESIP are to:

(a) Provide protection for the largest number of plan participants and amount of plan assets, given the available resources;

(b) Identify and investigate areas with the most potential for abuse;

(c) Detect and obtain corrections of ERISA violations;

(d) Establish a presence in the regulated ;

(e) Disseminate information and promote voluntary compliance; and

(f) Respond to participant complaints, public inquiries, and referrals from other government agencies.

In the years immediately following the announcement of the 1990 ESIP, the DOL focused its investigations on financial institutions. Since many of the larger financial institutions across the country have been investigated, the DOL is now focusing its ESIP resources on service providers, such as insurance companies, brokerage houses, third-party administrators, and, most recently, home health care agencies. (1)

Practitioner's Pointer: This is why service providers are strongly encouraged to request an accommodation subpoena from the DOL when notified that they are the target of a DOL investigation. An accommodation subpoena is a subpoena issued to persons (or entities) willing to testify or to produce the documents requested, but are concerned about the potential adverse consequences of doing so without a legal requirement. It is not good business to volunteer potentially damaging information to the DOL about one's clients.

Additionally, the attorney-client privilege may protect plan records that have been subpoenaed from plan legal counsel. However, under Dole v. Milonas,1 it has been held that the attorney-client privilege does not permit an attorney to refuse to identify plan participants to the DOL absent a showing that the release of such names would be tantamount to the provision of protected communications protected by the attorney-client privilege. The Milonas case also established that the plan (or its service providers) may petition the court to issue a protective order that restricts the use of the subpoenaed information to the agency conducting the investigation and the use of the information solely for the purpose of conducting the ERISA investigation.

1. An overview of the purpose of the form and general description of calculating 401(k) fees;

2. A schedule that summarizes the total plan fees and expenses; and

3. Additional schedules providing information on

a. Investment product fees and estimates,

b. Plan administration expenses,

(1.) EBSA Proposed Rule, "Fee and Expense Disclosures to Participants in Individual Account Plans," 72 Fed. Reg. 20457, April 25, 2007.

(1.) Labor Reg. [section] 2510.3-102(a)(2); 75 Fed. Reg. 2068 (Jan. 14, 2010).

(2.) Labor Regs. [subsection] 2510.3-102(a)(2); 75 Fed. Reg. 2068 (Jan. 14, 2010).

(1.) ERISA Enforcement Strategy Implementation Plan, Sept. 1990, pp. 20-21.

(1.) 889 F.2d 885 (9th Cir. 1989).

(1.) ERISA Sec. 703 (accompanying regulation cite has been reserved).

(1.) ERISA Enforcement Strategy Implementation Plan, Sept. 1990
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Title Annotation:CHAPTER XII: CIVIL COMPLIANCE AND ENFORCEMENT ISSUES
Publication:ERISA Facts
Date:Jan 1, 2010
Words:5211
Previous Article:Investigations of financial institutions.
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