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DOL Places Renewed Focus on Fiduciary Compliance Programs

by Melanie Waddell

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The Labor Department said Wednesday that it has moved two programs designed to facilitate and encourage fiduciary compliance under the purview of its Office of Compliance Initiatives, which the department launched in August.

Labor’s Employee Benefits Security Administration said in announcing the move that the OCI tools will help “employee benefit plans to self-correct violations,” and therefore protect employee benefits.

“EBSA’s goal is to help workers by restoring plan assets and securing the payment of promised benefits, and to help employee benefit officials understand the law.”

OCI is housed within Labor’s Office of the Assistant Secretary for Policy, which complements Labor’s enforcement efforts.

Allison Wielobob, counsel with Eversheds Sutherland in Washington, told ThinkAdvisor that Labor’s move “draws attention to the department’s interest in these programs.”

In part, she said, housing the programs under OCI “is probably intended to promote uniformity in voluntary compliance programs across the agency by centralizing oversight. It appears that the new office is at the DOL level, rather than under EBSA.”

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The two programs include:

  • The Voluntary Fiduciary Correction Program, which explains what corrective action is required and provides a mechanism for relief from enforcement actions and excise taxes under the Internal Revenue Code for 19 separate categories of fiduciary violations.
  • The Delinquent Filer Voluntary Correction Program, which explains the steps plan administrators who are filing overdue mandatory annual reports can take to avoid higher civil penalty assessments.

Under the Employee Retirement Income Security Act, “fiduciaries are responsible for operating employee benefit plans solely in the interest of participants and beneficiaries,” EBSA said.

“It appears that the DOL wants to put greater emphasis on voluntary correction programs,” Fred Reish, partner at Drinker Biddle & Reath’s Los Angeles office, told ThinkAdvisor on Wednesday. “That encourages employers to discover and correct their plan failures, for example, fiduciary breaches or prohibited transactions.”

OCI focuses on helping enforcement agencies more effectively use online resources to deliver information and compliance assistance, Labor explained.

OCI was launched in August, when Worker.gov and Employer.gov were also launched to provide information about workers’ rights and the responsibilities of firms toward their workers.

— Check out DOL Releases Proposed Rule on MEPs on ThinkAdvisor.

Melanie Waddell

@Think_MelanieW