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Employee Benefit Services

Is Your Retirement Plan at Risk of a DOL Investigation?

Implementing a competitive employee benefits package is vital to attracting and retaining top talent for your organization. Equally important is ensuring that your employee benefits package adheres to compliance regulations to avoid triggering a Department of Labor (DOL) audit.

In November 2021, the DOL reported that EBSA (Employee Benefits Security Administration) closed out 1,072 civil investigations regarding employee benefits plans. Nearly 69% of the DOL investigations resulted in plan sponsors’ corrective action or monetary consequences. The DOL recovered $499.5 million from companies that did not comply fully with EBSA regulations.

Learn the top triggers that put your employee retirement plan at risk of a DOL investigation and what actions to take to minimize your chances of undergoing an audit.

What Happens if Your Retirement Plan is Selected for a DOL Investigation?

If your company’s retirement plan is selected for a DOL investigation, you can expect several things to occur.

Factors That Put Your Company at Risk

The focus of DOL investigations is on reporting, disclosure, and fiduciary matters. Therefore, the top factors that put your company at risk for a DOL audit pertain to these types of mistakes.

The most common DOL audit triggers include:

  • Excessive or incorrect payments to service providers
  • Late deposits or remittances
  • Prohibited transactions
  • Improper claims procedures
  • Incomplete or late filing of Form 5500
  • An employee or participant makes a complaint about their benefits
  • Alternative investments

To avoid these errors, you can review Form 5500 and its required elements to ensure you comply. Additionally, you may consider working with an advisory firm specializing in preparing plan sponsors for potential DOL employee benefit plan audits.

How to Prepare for a DOL Investigation

Although compliance issues trigger many DOL investigations, the DOL performs many audits at random. It is essential to prepare your company for a surprise DOL investigation by maintaining compliance year-round.

You can take several preventative steps to comply with ERISA requirements, including maintaining up-to-date documents, addressing employee or participant concerns, and performing a self-audit through a professional advisory service.

Maintain Current Documentation

One of the essential elements to have in place regarding your employee benefits plan is current documentation. Essential documents include policies, amendments, and your summary plan description.

Keeping these forms organized and easily accessible can prevent confusion for plan sponsors and plan members. It can also help streamline a DOL audit if one occurs and help you address concerns quickly and precisely.

Address Complaints Immediately

According to the DOL, EBSA received 175,000 inquiries through its website and toll-free hotline in 2021. These inquiries likely resulted from employees and participants whose concerns were not handled appropriately by plan sponsors.

To reduce your risk of triggering a DOL investigation, address any complaints you receive about your employee benefits plan as soon as possible. Not only does this lessen the chance that a participant contacts the DOL directly, but it also makes you aware of potential problems you might otherwise overlook.

By addressing complaints promptly, you benefit from building trust with that employee. You also have the chance to change your benefits package to better align with EBSA rules.

Review Form 5500

The DOL provides public instructions and copies of Form 5500 for review year-round. Taking the time to review the form and its instructions can help you minimize your risk for a DOL investigation.

Reference forms available online include Form 5500 (Report of Employee Benefit Plan) and Schedules A through SB. Work with your retirement plan advisor or company accountant to go through these forms line by line to ensure you have the necessary documents and data to complete filing when tax season arrives.

Perform Compliance Self-Review

The best way to ensure you comply with ERISA is to perform a compliance self-review. An employee benefits services company can conduct a thorough employee benefit plan audit to identify potential compliance issues. They analyze your plan documents, financial statements, investments, costs of administration, participant’s allocations, and all other responsibilities you hold as the plan sponsor.

If the advisory company finds any errors, you will receive a recommendation on necessary corrections to bring the retirement plan into compliance. The advisor can also help you put controls in place to ensure that your employee benefits plan and accompanying operations remain compliant in the future.

Stay Prepared for a DOL Investigation 

In today’s marketplace, employers need to offer competitive employee benefits packages to attract and retain top performers in Los Angeles, Long Beach, and Orange County. Maintaining compliance with your employee benefits package is equally important to avoid triggering a DOL audit.

Windes professionals provide consulting and third-party administrative services for employer-sponsored qualified retirement and welfare employee benefit plans. Windes’ Employee Benefit Services (EBS) can partner with your organization to offer employee benefit plans that are cost-effective and compliant.

Contact Windes today at 844.494.6337 or email us at to learn how we can help you prepare for a DOL audit of your employee benefits plan.

Therese Cheevers
Therese Cheevers, APA, ERPA

Connect with Therese to learn more about our services, including plan design and administration, annual reporting and disclosure to plan participants and the government, and specialized benefit packages such as distribution planning and compliance reviews.
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