- The DOL is essentially looking to
see if anything suggests that a provider’s advice or service personnel are
acting as functional fiduciaries, including whether they are providing
investment advice, even if they do not consider themselves to hold this
role. Any compensation a provider receives for this must be level.
- Provide ongoing education and
training for employees; education is not required by the DOL, but it is a
- Find out if the adviser is using
benchmarking, to show reasons for selecting providers.
year, the DOL hires department investigators who are specifically devoted to
auditing plan sponsors and providers, and it is ramping up the numbers, Sohn
said. Historically, the department looked just at plan sponsors, and only
investigated providers because of a complaint, Sohn said. Now, the auditing can
come from either direction.
DOL is also heightening its focus on third-party administrators (TPAs) because
their services are discrete, Sohn said, and the department will likely expand
its attention to recordkeepers and broker/dealers. Now, the department is in
information and learning mode, but the new administration and DOL funding will
affect what happens next. Regardless, the department will keep looking. While
it is not at the point where all providers or sponsors are subject to cyclical
audits, the DOL is “taking a lot of its plays out of the SEC [Securities and Exchange
Commission] playbook,” Sohn said.
webinar was hosted by AXIS Retirement Analytics Platform, a retirement
information system offered by Castle Rock Innovations to provide 408(b)(2)
compliance education. It was the first in a series of monthly webinars about
best practices for DOL audits.