It’s that time of year again—time for your quarterly investment committee meetings. It’s no coincidence that the ‘failure to operate benefit plans in a prudent manner’ is at the top of the Department of Labor’s (DOL) list of common plan failures. (See the full list of common plan failures at the link below.) The DOL has a variety of investigative initiatives intended to root out these types of compliance issues. For instance, the DOL currently has a compliance initiative focusing on the types of compensation paid to plan consultants and investment advisors. Additionally, the DOL has initiatives focusing on certain types of benefit plans (e.g., multiple employer welfare arrangements, employee stock ownership plans, etc.). In 2013, the DOL’s enforcement branch collected over $1.6 billion in penalties and assets recovered as a result of its examination efforts.
For a full list of the DOL’s examination initiatives and common compliance errors, visit:
For a summary of the DOL’s enforcement achievements, visit:
Make sure your company is protected from fiduciary challenges and DOL audits by implementing prudent administration procedures, starting with quarterly investment committee meetings. Investment committees should examine retirement plan performance and investment objectives. Committees should be guided by the plan’s Investment Policy Statement as well as a committee charter or bylaws setting forth the role of the committee and its operational rules. The implementation of prudent plan administrative procedures can go a long way in protecting plan fiduciaries from participant lawsuits.