DOL Introduces Multi-Agency Opinion Letter Program

The initiative aims to improve compliance assistance by providing more accessible guidance about federal labor laws across five agencies, including the Employee Benefits Security Administration.

The Department of Labor on June 2 announced a program of opinion letters, to be released by five of its agencies, including the Employee Benefits Security Administration, aiming to provide clearer and more accessible guidance on federal labor laws.

Other participating agencies include the Wage and Hour Division; the Occupational Safety and Health Administration; the Veterans’ Employment and Training Service; and the Mine Safety and Health Administration.

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EBSA will release advisory opinions and information letters, from which practitioners governed by the Employee Retirement Income Security Act have historically drawn legal advice. DOL opinion letters are not legally binding, but they can provide helpful guidance, particularly for plan sponsors, on how the DOL applies the law to the circumstances at hand.

If a plan sponsor faces uncertainty about a specific law or the plan sponsor’s compliance, they can request the department’s opinion. If the DOL offers guidance, plan sponsors facing a similar situation can refer to the guidance.

“Opinion letters are an important tool in ensuring workers and businesses alike have access to clear, practical guidance,” said Deputy Secretary of Labor Keith Sonderling in a statement. “Launching this program is part of our broader effort to empower the public with the information they need to understand and comply with the laws the department enforces.”

Though plan sponsors have relied on sub-regulatory advice for ERISA-related legal matters for years, the DOL issued an average of one advisory opinion per year since 2014. By comparison, in 2012 and 2013, the DOL issued five advisory opinions each year.

Legal experts say the opinion letter program re-opens doors to plan sponsors and the regulatory community.

“This is the department’s way of indicating to the regulated community, ‘Come in, we’re open for business,’ and [of] resetting its relationship with the public and the regulated community,” says Katie Kohn, a partner in Thompson Hine LLP, who advises clients in retirement plan compliance.

Legal experts say the opinion letter program could signal where the agency intends to deploy its limited resources. In February, probationary employees at the understaffed EBSA were laid off as part of President Donald Trump’s initiative to shrink the size of federal agencies, and last month, Trump proposed a budget plan that would reduce the DOL’s funding by 26%.

The same experts note that the approach could be effective, considering the Supreme Court’s 2024 ruling in Loper Bright Enterprises et al. v. Raimondo, Secretary of Commerce et al., which overturned the Chevron deference to federal agencies’ interpretations of laws.

“Sub-regulatory advice might be drawn into increased question in light of [the ruling], but in an environment in which the practitioner is starving for authority, all of the guidance from the DOL is appreciated and important,” says Andrew Oringer, a partner in Wagner Law Group.

The approach also means the legal community could receive expedited guidance, Thompson Hines’ Kohn says. However, she notes that comment letters have less force and effect than actual regulations.

“They’re able to more nimbly and more quickly get guidance out to the community without going through notice and comment rulemaking, which takes considerably longer than an advisory opinion or other sub-regulatory guidance,” Kohn says.

Latest 401(k) Forfeiture Lawsuit Filed Against UBS

The investment bank was accused of mismanaging forfeited funds in its 401(k) plan by using them toward reducing employer contributions.

UBS has joined the list of companies facing lawsuits over their management of forfeited funds in their 401(k) plans.

In Czakoczi v. UBS AG et al, filed Thursday in U.S. District Court for the District of New Jersey, the investment bank is accused of acting in its own self-interest by using forfeitures to reduce its employer contributions, as opposed to allocating forfeited funds toward paying plan expenses.

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This same argument has been made in the slew of other Employee Retirement Income Security Act lawsuits against plan sponsors. Most recently, Cigna Group was sued for its treatment of forfeitures, while software company Intuit Inc. reached a settlement after its motion to dismiss the case was denied in 2024.

Carol Czakoczi, a participant in the UBS 401(k) Plan, claimed in the complaint that UBS’s use of the forfeitures to reduce employer contributions is “not in the best interest of participants, as participants then pay all of the plan’s expenses out of their individual accounts, leaving participants with less assets for distribution or investment.”

According to the lawsuit, the plan’s documents state that “forfeitures shall be applied to either reduce succeeding company contributions by the employers, or pay plan expenses, as determined by the plan Administrator in its sole discretion.”

However, Czakoczi’s complaint argues that because UBS is not at risk of satisfying its contribution obligations, it should have allocated forfeited funds to pay plan expenses.

The lawsuit further accuses UBS of failing to undertake any reasoned and impartial decisionmaking process to determine which use of the plan’s forfeited funds was in the best interest of participants.

The plaintiff, represented by Dicello Levitt LLP, asks the court to declare that UBS fiduciaries breached their ERISA duties and to require UBS to make good “plan losses” resulting from such alleged breaches.

According to its most recent Form 5500, the UBS 401(k) plan has more than $9 billion in assets and 32,447 participants.

UBS did not immediately respond to a request for comment.

Several forfeiture cases have been dismissed in the last year, including one earlier this month that was filed against the Kaiser Foundation Health Plan. In that case, the district court judge found that the plaintiff’s claims were insufficient, adding that ERISA does not impose a broader duty to maximize participant balances beyond what the plan terms require.

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