DOL Enforcement and ERISA Plan Advisers

A recent article in AdvisorOne entitled “DOL Cracks Down on Retirement Plan Advisors For Fiduciary Negligence,” quoting Andy Larson of the Retirement Learning Center, focuses on the large number of civil, and some criminal, enforcement actions bought by the Employee Benefit Security Administration (EBSA) against advisers for fiduciary negligence.

According to Larson, in addition to recognizing that the DOL has jurisdiction over them, advisers must ensure they have a “strong documentable fiduciary process.” From the plan sponsor’s side, Larson recommends that “the plan sponsor should be asking advisors what they can do to help my plan comply with the DOL rules”  to minimize the DOL liability for their employers.

The article cites a white paper published by the Columbia Management Learning Center warning plan sponsors of their fiduciary duty to comply with the DOL regulations and that the probability that the DOL could audit their plan is increasing.  To emphasize this point the paper notes, that during 2010, the DOL audited more than 3,100 plans finding that 73% of them were required to restore losses to the plan or take another type of corrective action to correct plan deficiencies.

Author: Dexter Johnson

The author is a an attorney who for the past 14 years has concentrated his practice in representing, successfully, investment advisers, broker-dealers, corporations and individuals who are subject to SEC, FINRA, State or other regulations and who may be the subject of regulatory examination, review or investigation. He formerly worked at the SEC. His regulatory and litigation experience has encompassed virtually every type of securities issue in the industry. He has also negotiated favorable outcomes in many of these matters for his clients.