ESOPs High on DOL Investigations List

On April 25, Virginia Smith of the U.S. Department of Labor's Employee Benefits Security Administration told a meeting of the American Society of Pension Plan Actuaries that ESOP violations were one of five high-priority DOL enforcement projects. (The others are health fraud, improper forwarding of employee contributions to plans, orphan plans, and pension consultant conflicts of interest.) Smith said valuation issues were a common violation, although she also cited plan operational issues. Consultants have noticed an increase in DOL audits, although to date no consistent pattern (or evidence of violations) has emerged.