Litigators Not the Only Ones Looking Into Retirement Plan Investments and Fees

Though it’s been going on since 2016, retirement plan sponsors may not know about the Department of Labor’s (DOL)’s Employee Benefit Security Administration’s (EBSA)’s Plan Investment Conflicts (PIC) project.

The project investigates issues related to fiduciary service provider compensation and conflicts of interest in relation to plan asset vehicles. In addition, the PIC project continues the efforts of prior projects by investigating the receipt of improper or undisclosed compensation and supports the DOL’s regulatory and reporting initiatives intended to ensure that plan fiduciaries and participants receive comprehensive disclosure about service provider compensation and conflicts of interest.

EBSA says the project exams have reviewed conflicts of interest of fiduciary service providers and investment managers of plan asset vehicles that led to conflicted decision making processes, imprudent application of investment guidelines and the payment of excessive fees.

The project continues to examine plan fiduciary due diligence related to investment decisions, service provider selection and valuation preparation. The EBSA says it is also attuned to whether plan fiduciaries are performing their duty to oversee and monitor service provider arrangements, even when no conflict exists. PIC exams also focus on indirect compensation arrangements, conflicted and undisclosed arrangements and arrangements that are outside of market standards.

The EBSA warns it will conduct criminal investigations of potential fraud, kickback, and embezzlement involving investment managers and advisers to plans and participants.