Enforcement Manual

Preface

Background

Since at least 1996, EBSA has had an Enforcement Manual Committee (Committee). The Director of Enforcement is responsible for appointing and overseeing the Committee. The Committee is comprised of national and regional office members (including, but not limited to: Regional Directors, Deputy Regional Directors, Associate Regional Directors, Supervisory Investigators, Investigator and Office of Enforcement staff). The Committee’s co-chairs will be a Senior Enforcement Advisor, Enforcement and a Deputy Regional Director. EBSA staff can suggest changes to the Enforcement Manual through an e-mail address posted on the EBSA Intranet.

Process

The Enforcement Manual review process is as follows:

The Committee reviews and drafts proposed changes to the Enforcement Manual that impact the investigative process, as needed, but not less than every two years.
The Committee makes recommendations for any changes or updates to the Enforcement Manual to the Director of Enforcement.
Director of Enforcement reviews proposed changes with the Regional Directors (RDs) and the Deputy Assistant Secretary for National Office Operations and the Deputy Assistant Secretary for Regional Offices, as appropriate.
Office of the Solicitor (SOL)/Plan Benefits Security Division (PBSD) review and clear proposed changes.
The Director of Enforcement, the Deputy Assistant Secretary for National Office Operations and the Deputy Assistant Secretary for Regional Offices review final changes, as appropriate.

Implementation

Changes to the Enforcement Manual are made electronically. A table describing the changes and dates of changes will be included as an Appendix to the Enforcement Manual. The electronic version annotates by section the date of changes. A memorandum to the field summarizes the changes, as needed, but no less than every two years.

Record Maintenance

The Committee will maintain the following records:

Suggestions for changes.
A redline of all revisions.
A chart of all revisions, reason for the change and date.
Copies of all memorandum memorializing the changes.
HTML and PDF versions.

The Employee Benefits Security Administration is an agency within the Department of Labor that administers and enforces the provisions of Title I of the Employee Retirement Income Security Act (ERISA). ERISA established fiduciary and other standards for employee benefit plans sponsored by private-sector employers. The Assistant Secretary, appointed by the President, directs EBSA and reports directly to the Secretary of Labor.

Headquarters and Staffing

EBSA headquarters is located in Washington, D.C. Its enforcement activities are performed mostly in field offices located in 13 cities throughout the United States. Over 400 investigators/auditors work in field offices, all of whom are highly skilled professionals. Many are lawyers or Certified Public Accountants, and others have advanced degrees in business and finance. The Office of Enforcement is responsible for operational review and oversight, and enforcement policy.

Responsibility

EBSA shares responsibility with the Internal Revenue Service and the Pension Benefit Guaranty Corporation for the administration and enforcement of ERISA. Under ERISA, the Secretary of Labor is responsible for protecting the rights and financial security of approximately 143 million employee benefit plan participants and beneficiaries and for assuring the integrity and effective management of the private pension and welfare benefit system. EBSA has enforcement authority over employee benefit plans covering workers in a variety of industries, including communications, retail, shipping, and financial services.

Employee benefit plans invest in a variety of investment vehicles, including stocks, bonds and real estate. Individuals and companies who provide services to employee benefit plans, such as investment advisors, trust departments, insurance companies, consultants, and others, are also governed by ERISA.

EBSA carries out its responsibilities by conducting a wide range of activities, including civil and criminal investigations, to determine whether there are violations of ERISA and the sections of Title 18, as they relate to employee benefit plans.

Authority and Coordination

EBSA Authority
EBSA⁽¹⁾ has the authority to:	Source	See also
Investigate potential violations of ERISA Title I	ERISA Sections 504 and 506
Investigate and determine whether a person has violated ERISA Title I or any related regulations or orders	ERISA Section 504(a)
Investigate criminal violations of U.S. Code Title 18 as they relate to employee benefit plans	Comprehensive Crime Control Act of 1984 ERISA Section 506(b)	Figure 2 Criminal Investigations Section
Share information with people affected by the subject of an EBSA investigation (usually, but not exclusively, plan fiduciaries, participants, beneficiaries, or their representatives) Note: This provision does not authorize EBSA to disclose information prohibited by another statute. See the section on Release of Information for disclosure restrictions.	ERISA Section 504(a)	Figure 1
Investigate and present issues related to whether a federal court should grant a Certificate of Exemption under Section 411(a)	MOU between the Department and DOJ	Prohibited Persons Section
Obtain Protected Health Information from health plans, service providers, and physicians to ensure compliance with ERISA	HIPAA
Litigate civil cases related to ERISA (with a few exceptions) in district courts and courts of appeal Note: The Department of Justice will prosecute all cases involving ERISA's criminal provisions.	Feb. 11, 1975 MOU between the Department and DOJ

¹ The Secretary of Labor can delegate this authority to the Assistant Secretary of Labor for Employee Benefits and Security.

(Figure 1)
Secretary's Order 01-2003

Subject: Delegation of Authority and Assignment of Responsibilities to the Employee Benefits Security Administration

/s/ Elaine L. Chao
Secretary of Labor

January 23, 2003

(Figure 2)
Memorandum Of Understanding

Memorandum of Understanding Between the Departments of Justice and Labor Relating to the Investigation and Prosecution of Crimes and Related Matters under Title I of the Employee Retirement Income Security Act of 1974

It is hereby agreed and understood between the Department of Justice and the Department of Labor as follows:

Whereas Title I of the Employee Retirement Income Security Act of 1974 (P.L. 93-406, 88 Stat. 829, 29 U.S.C. 1001, hereinafter referred to as "the Act") imposes certain duties and responsibilities upon the Attorney General and the Secretary of Labor with regard to prosecution of crimes and related matters arising under the Act; and

Whereas, section 504 of the Act imposes upon the Secretary of Labor the responsibility for conducting investigations of persons who have violated or are about to violate any provision of Title I of the Act or any regulation issued thereunder; and

Whereas, section 506 of the Act provides that the Secretary of Labor may make interagency agreements to avoid unnecessary expense and duplication of functions among government agencies and ensure cooperation and mutual assistance in the performance of his functions under the Act; and

Whereas, section 506 of the Act provides that the Attorney General or his representative shall receive from the Secretary of Labor for appropriate action such information developed in the performance of the Secretary's functions under Title I of the Act as may be found to warrant consideration for criminal prosecution; and

Whereas, it is desirable and essential that the areas of responsibility and the procedure to be used in investigations and prosecutions of offenses arising under the Act should be the subject of a formal agreement between the Departments;

/S/ Peter J. Brennan
Secretary of Labor

/S/ L. N. Silberman
(Acting) Attorney General

February 5, 1975

February 8, 1975

(Figure 3)
United States Department Of Justice
United States Department Of Labor
Memorandum Of Understanding

Whereas, the Employee Retirement Income Security Act of 1974 (P.L. 93-406; 88 Stat. 829), the Occupational Safety and Health Act of 1970 (P.L. 91-596; 84 Stat, 1590), and the Farm Labor Contractor Registration Act Amendments of 1974 (P.L. 93-518; 88 Stat. 1652), each provide that except for litigation in the Supreme Court of the United States and the United States Court of Claims, attorneys appointed by the Secretary of Labor may represent the Secretary in civil actions, subject to the direction and control of the Attorney General;

Whereas, this memorandum has been entered into in accordance with the legislative history of the aforementioned provisions; and

Whereas, satisfactory cooperative relationships exist between the Civil Division of the Department of Justice and the Department of Labor with respect to the conduct of litigation under other statutes administered by the Department of Labor;

Now, therefore, the following memorandum of understanding is entered into between the Attorney General of the United States and the Secretary of Labor for the purposes of promoting the efficient and effective handling of government litigation concerning these statutes.

With respect to cases arising before the effective date of this agreement, the Departments of Justice and Labor shall enter into mutually satisfactory arrangements for the transfer of litigation responsibility in individual cases, consistent with the purposes of this agreement and where such transfer will not be prejudicial to the handling of such cases.

/S/ Laurence H. Silberman
Attorney General

/S/ Peter J. Brennan
Acting Secretary of Labor

February 11, 1975

Footnotes

This Order superseded Secretary's Order 1-86 dated January 16, 1986 that transferred the delegated authority and assigned responsibilities for the administration of ERISA from the Office of Pension Welfare Benefit Programs to the Pension and Welfare Benefits Administration.
Regional Directors have received re-delegated authority and assigned responsibility for ERISA enforcement activities, including authority to sign and issue certain subpoenas, among other powers. Regional Directors have discretion to further delegate certain signatory responsibility to selected staff. See Subpoenas section.
This authority has been redelegated to the Deputy Assistant Secretary for Program Operations and the Director of Enforcement.
Secretary's Order 01-2003 superseded Secretary's Order 1-87. 68 Fed. Reg. 5373 (Feb. 3, 2003).

Purpose. To provide guidance on implementing agreements between the Department and the IRS for coordinating investigations of employee benefit plans. (Figure 1)

IRS Background.

Divisions. The IRS has four operating divisions: Wage and Investment, Small Business/Self-Employed, Large Business and International, and Tax Exempt and Government Entities (TE/GE). The Department coordinates primarily with the IRS TE/GE division, which services employee plans, tax-exempt organizations, and government entities.
Employee Plans (EP). The Department works closest with the EP segment of the TE/GE division. The EP segment serves retirement plans, IRAs, related trusts, plan participants, beneficiaries, and employer sponsors of retirement plans. The EP segment has following departments: Determinations, Voluntary Compliance, Examinations, and Customer Account Services.

EP Offices. The EP segment covers five geographic examination areas based on customer locations, workforce size, and employee locations. EP Examinations and the geographic examination areas:

Geographic Areas
Office	Location	Jurisdiction
Northeast	Hartford, CT	Connecticut, Maine, Massachusetts, New Hampshire, New Jersey, New York, Rhode Island, Vermont
Great Lakes	Chicago, IL	Minnesota, Nebraska, North Dakota, South Dakota, Wisconsin, Illinois, Indiana, Iowa, Kentucky, Michigan
Gulf Coast	Nashville, TN	Alabama, Arkansas, Florida, Georgia, Kansas, Louisiana, Mississippi, Missouri, Oklahoma, Tennessee, Texas
Mid-Atlantic	Philadelphia, PA	Delaware, Maryland, North Carolina, Ohio, Pennsylvania, South Carolina, Virginia, West Virginia, Washington, D.C.
Pacific Coast	Denver, CO	Alaska, Arizona, California, Colorado, Hawaii, Idaho, Montana, Oregon, Nevada, New Mexico, Utah, Washington, Wyoming

EP Contact Information. Employee Plan Customer Service⁽¹⁾:

Internal Revenue Service
Attn: EP Customer Service Manager
P.O. Box 2508
Cincinnati, OH 45201
(P) 877-829-5500

(Figure 1)
Memorandum Of Understanding
Internal Revenue Service/Department of Labor Coordination Agreement

In order for the IRS and DOL to fulfill the mandates of the Employee Retirement Income Security Act of 1974 (ERISA) Sections 3003 and 3004 and in accordance with ERISA Section 506, the IRS and DOL have executed the Internal Revenue Service/Department of Labor Coordination Agreement (Agreement).

The attached Agreement reflects changes resulting from the Modernization of the IRS, the change in name of the Department of Labor's benefit plan regulatory agency from the Pension and Welfare Benefits Administration (PWBA) to the Employee Benefits Security Administration (EBSA), and other revisions identified from the agencies' experiences under the prior Agreements.

Although an essential component of the Agreement is timely coordination and emphasis on the need to eliminate duplicative investigative efforts, the agencies recognize there may be situations that require both agencies to become involved. The IRS and DOL agree to identify past situations where both agencies have had an examination/investigation on the same subject and to determine when it may be beneficial for the agencies and the public for examinations/investigations to be conducted jointly.

In reviewing the Agencies' experiences under the prior Agreements, it was determined that both agencies are devoting resources to the coordination of welfare plan investigations that appear to be unnecessary. In that regard, case opening notification (EBSA Form 205) and referral checksheet completion (IRS Form 6212-C) for welfare plans have been eliminated. DOL can make referrals to the IRS for tax matters outside EP jurisdiction in the form of a letter.

DOL will continue to refer Checksheet A to IRS (Form 6212-A) to IRS for pension benefit plans in accordance with the requirements of Article II, D., of the Agreement. IRS will continue to make referrals to DOL on Checksheet B (Form 6212-B) in accordance with the requirements of Article II, C. of the Agreement. Both forms have been revised. See Appendices B and C.

Under the Modernization of the IRS, Employee Plans and Exempt Organizations are separate units under the Tax Exempt/Government Entities Operating Division. The Employee Plans Examinations Headquarters is located in Baltimore. The Director, EP Examinations,

supervises six Area Managers located around the country and the Manager of EP Examinations, Programs and Review. The IRS Key District concept was eliminated. Referrals made by EBSA personnel are now made to the IRS through the Manager, EP Examinations Classification in Baltimore.

In accordance with Article V.C of the Agreement, representatives of the IRS and DOL will meet quarterly.

/s/ June 3, 2003
Carol Gold
Director, Employee Plans
Tax Exempt and Government Entities Division
Internal Revenue Service

/s/ June 3, 2003
Alan D. Lebowitz
Deputy Assistant Secretary for Program Operations
Employee Benefits Security Administration

(Figure 1a)
IRS/DOL Coordination Agreement
Index

Notification of Examination
1. General
2. IRS Action on Notification
3. EBSA Action After Positive Feedback
Examination Referral Program
1. General
2. Referral Procedures
3. Examinations Initiated by IRS
4. Investigations Initiated by EBSA
IRS Appeals Office Procedures
Notification of Litigation
1. Litigation Involving IRS and Relating to the Administration of Title I of ERISA
2. Litigation Involving DOL and Relating to Employee Benefit Plans
Tracking/Feedback
EBSA Requests for Tax Return Information from the IRS

List of Appendices

IRS / EBSA Office Referral Directory
Referral Checksheet 6212-A
Referral Checksheet 6212-B
EBSA Form 217, Document Transmittal
Section 103 of the Reorganization Plan No. 4 of 1978

[Note: Some of the above listed appendices are not included in the current version of the Enforcement Manual.]

This document provides the procedures for the coordination of examination and litigation activities involving employee benefit plans between the Employee Benefits Security Administration (EBSA) of the Department of Labor (DOL) and the Employee Plans (EP) of the Internal Revenue Service (IRS).

(Figure 1b)
Addendum to IRS/DOL Coordination Agreement

For purposes of implementing the Internal Revenue Service/Department of Labor Coordination Agreement after the date this Addendum is agreed to by both Agencies, the following provisions of the Agreement are modified as follows:

/s/ 10/24/2013
Robert S. Choi
Director, Employee Plans
Tax Exempt and Government Entities Division
Internal Revenue Service

/s/ 10/23/2013
Alan D. Lebowitz
Deputy Assistant Secretary for Program Operations
Employee Benefits Security Administration

IRS – EP & DOL - EBSA Local Contacts

EP Northeast Area Office – Contact: (Name) Area Office Manager or Representative (Telephone Number)
Name	Office	Representative	Telephone Number
Name	EBSA Boston Regional Office	Regional Director or Authorized Representative	(617) 565-9600
Name	EBSA New York Regional Office	Regional Director or Authorized Representative	(212) 607-8600

EP Mid Atlantic Area Office – Contact: Area Office Manager or Representative (Telephone Number)
Name	Office	Representative	Telephone Number
Name	EBSA Philadelphia Regional Office	Regional Director or Authorized Representative	(215) 861-5300
Name	EBSA Cincinnati Regional Office	Regional Director or Authorized Representative	(859) 578-4680

EP Gulf Coast Area Office – Contact: Area Office Manager or Representative (Telephone Number)
Name	Office	Representative	Telephone Number
Name	EBSA Atlanta Regional Office	Regional Director or Authorized Representative	(404) 302-3900
Name	EBSA Dallas Regional Office	Regional Director or Authorized Representative	(972) 850-4500
Name	EBSA Kansas City Regional Office	Regional Director or Authorized Representative	(816) 285-1800

EP Great Lakes Area Office – Contact: Area Office Manager or Representative (Telephone Number)
Name	Office	Representative	Telephone Number
Name	EBSA Chicago Regional Office	Regional Director or Authorized Representative	(312) 353-0900

EP Pacific Coast Area Office – Contact: Area Office Manager or Representative (Telephone Number)
Name	Office	Representative	Telephone Number
Name	EBSA Los Angeles Regional Office	Regional Director or Authorized Representative	(626) 229-1000
Name	EBSA San Francisco Regional Office	Regional Director or Authorized Representative	(415) 625-2481

(Figure 2)
Reorganization Plan No. 4 Of 1978

Prepared by the President and transmitted to the Senate and the House of Representatives in Congress assembled, August 10, 1978, pursuant to the provisions of Chapter 9 of Title 5 of the United States Code.

Employee Retirement Income Security Act Transfers

Section 101. Transfer to the Secretary of the Treasury

Except as otherwise provided in Sections 104 and 106 of this plan, all authority of the Secretary of Labor to issue the following described documents pursuant to the statutes hereinafter specified is hereby transferred to the Secretary of the Treasury:

regulations, rulings, opinions, variances and waivers under Parts 2 and 3 of Subtitle B of Title I and subsection 1012(c) of Title II of the Employee Retirement Income Security Act of 1974 (29 U.S.C. 1001) (hereinafter referred to as "ERISA"), Except for sections and subsections 201,203(a)(3)(B), 209, and 301(a) of ERISA;
such regulations, rulings, and opinions which are granted to the Secretary of Labor under Sections 404, 410, 411, 412, and 413 of the Internal Revenue Code of 1986, as amended (hereinafter referred to as the "Code"), Except for subsections 411(a)(3)(B) of the Code and the definitions of "collectively bargained plan" and "collective bargaining agreement" contained in subsections 404(a)(1)(B) and (a)(1)(C), 410(b)(2)(A) and (b)(2)(B), and 413(a)(1) of the Code; and
regulations, rulings, and opinions under subsections 3(19), 3(22), 3(23), 3(24), 3(25), 3(27), 3(28), 3(29), 3(30), and 3(31) of Subtitle A of Title I of ERISA.

Section 102. Transfers to the Secretary of Labor

Except as otherwise provided in Section 105 of this Plan, all authority of the Secretary of the Treasury to issue the following described documents pursuant to the statutes hereinafter specified is hereby transferred to the Secretary of Labor:

regulations, rulings, opinions, and exemptions under section 4975 of the Code,

Except for (i) subsections 4975(a), (b), (c)(3), (d)(3), (e)(1), and (e)(7) of the Code; (ii) to the extent necessary for the continued enforcement of subsections 4975(a) and (b) by the Secretary of the Treasury, subsections 4975(f)(1), (f)(2), (f)(4), (f)(5) and (f)(6) of the Code; and (iii) exemptions with respect to transactions that are exempt by subsection 404(c) of ERISA from the provisions of Part 4 of Subtitle B of Title I of ERISA; and
regulations, rulings, and opinions under subsection 2003(c) of ERISA, Except for subsection 2003(c)(1)(B).

Section 103. Coordination Concerning Certain Fiduciary Actions

In the case of fiduciary actions which are subject to Part 4 of Subtitle B of Title I of ERISA, the Secretary of the Treasury shall notify the Secretary of Labor prior to the time of commencing any proceedings to determine whether the action violates the exclusive benefit rule of subsection 401(a) of the Code, but not later than prior to issuing a preliminary notice of intent to disqualify under that rule, and the Secretary of the Treasury shall not issue a determination that a plan or trust does not satisfy the requirements of subsection 401(a) by reason of the exclusive benefit rule of subsection 401(a), unless within 90 days after the date on which the Secretary of the Treasury notifies the Secretary of Labor of pending action, the Secretary of Labor certifies that he has no objection to the disqualification or the Secretary of Labor fails to respond to the Secretary of the Treasury. The requirements of this paragraph do not apply to the case of any termination or jeopardy assessment under sections 6851 or 6861 of the Code that has been approved in advance by the Commissioner of Internal Revenue, or, as delegated, the Assistant Commissioner for Employee Plans and Exemption Organizations.

Section 104. Enforcement by the Secretary of Labor

The transfers provided for in Section 101 of this Plan shall not affect the ability of the Secretary of Labor, subject to the provisions of Title III of ERISA relating to jurisdiction, administration, and enforcement, to engage in enforcement under Section 502 of ERISA or to exercise the authority set forth under Title III of ERISA, including the ability to make interpretations necessary to engage in such enforcement or to exercise such authority. However, in bringing such actions and in exercising such authority with respect to Parts 2 and 3 of Subtitle B of Title I of ERISA and any definitions for which the authority of the Secretary of Labor is transferred to the Secretary of the Treasury as provided in Section 101 of this Plan, the Secretary of Labor shall be bound by the regulations, rulings, opinions, variances, and waivers issued by the Secretary of the Treasury.

Section 105. Enforcement by the Secretary of the Treasury

The transfers provided for in Section 102 of this Plan shall not affect the ability of the Secretary of the Treasury, subject to the provisions of Title III of ERISA relating to jurisdiction, administration, and enforcement, (a) to audit plans and employers and to enforce the excise tax provisions of subsections 4975(a) and 4975(b) of the Code, to exercise the authority set forth in subsections 502(b)(1) and 502(h) of ERISA, or to exercise the authority set forth in Title III of ERISA, including the ability to make interpretations necessary to audit, to enforce such taxes, and to exercise such authority; and (b) consistent with the coordination requirements under Section 103 of this Plan, to disqualify, under section 401 of the Code, a plan subject to Part 4 of Subtitle B of Title I of ERISA, including the ability to make the interpretations necessary to make such disqualification. However, in enforcing such excise taxes, and, to the extent applicable, in disqualifying such plans the Secretary of the Treasury shall be bound by the regulations, rulings, opinions, and exemptions issued by the Secretary of Labor pursuant to the authority transferred to the Secretary of Labor as provided in Section 102 of this Plan.

Section 106. Coordination for Section 101 Transfers

Section 107. Evaluation

On or before April 30, 1980, the President will submit to both Houses of the Congress an evaluation of the extent to which this Reorganization Plan has alleviated the problems associated with the present administrative structure under ERISA, accompanied by specific legislative recommendations for a long-term administrative structure under ERISA.

Section 108. Incidental Transfers

So much of the personnel, property, records, and unexpended balances of appropriations, allocations and other funds employed, used, held, available, or to be made available in connection with the functions transferred under this Plan, as the Director of the Office of Management and Budget shall determine, shall be transferred to the appropriate agency, or component at such time or times as the Director of the Office of Management and Budget shall provide, except that no such expended balances transferred shall be used for purposes other than those for which the appropriation was originally made. The Director of the Office of Management and Budget shall provide for terminating the affairs of any agencies abolished herein and for such further measures and dispositions as such Director deems necessary to effectuate the purpose of this Reorganization Plan.

Section 109. Effective Date

The provisions of this Reorganization Plan shall become effective at such time or times, on or before April 30, 1979, as the President shall specify, but not sooner than the earliest time allowable under Section 906 of Title 5, United States Code.

(Figure 3)
Memorandum of Understanding Among the U.S. Department of the Treasury,
the U.S. Department of Labor,
and the U.S. Department of Health and Human Services

Article I

Introduction and Purpose

The Health Insurance Portability and Accountability Act of 1996 ("HIPAA"), Pub. L. No. 104-191, was enacted on August 21, 1996. Titles I and IV of HIPAA amended the Internal Revenue Code, the Employee Retirement Income Security Act of 1974, and the Public Health Service Act to add provisions to improve access, portability and continuity of health insurance coverage in the group and individual health insurance markets.

Section 104 of HIPAA directs the Secretary of the Treasury, the Secretary of Labor, and the Secretary of Health and Human Services to enter into an interagency memorandum of understanding. Section 104 requires that the memorandum of understanding ensure that regulations, rulings, and interpretations relating to the changes made by Subtitle A of Title I and section 401 of Title IV of HIPAA over which two or more Secretaries have responsibility ("shared provisions") are administered so as to have the same effect at all times. Section 104 also requires the coordination of policies relating to enforcing the shared provisions in order to avoid duplication of enforcement efforts and to assign priorities in enforcement. This memorandum of understanding (MOU) is adopted pursuant to section 104 of HIPAA.

This MOU formally establishes an interagency agreement among the Secretary of the Treasury, the Secretary of Labor, and the Secretary of Health and Human Services to ensure coordination in the manner and for the purposes set forth in section 104 of HIPAA. The Departments also intend to follow the process set forth in this MOU, to the extent appropriate, with regard to interpretations and enforcement of the provisions of the Newborns' and Mothers' Health Protection Act of 1996, the Mental Health Parity Act of 1996, and Subsequent Legislation. In addition, the Departments of Labor and HHS agree to follow the process set forth in this MOU, to the extent appropriate, with regard to interpretations and enforcement of the provisions of the Women's Health and Cancer Rights Act of 1998.

Article II

Authority

This MOU is entered pursuant to the authority set forth in section 104 of HIPAA, Pub. L. No. 104-191.

Article III

Definitions

Article IV

Background

Subtitle A of Title I and section 401 of Title IV of HIPAA are intended to improve the availability of private health insurance by increasing portability, access and renewability in the group market. HIPAA establishes limits on the imposition of preexisting condition exclusions and generally prohibits group health plans and health insurance issuers from discriminating against individuals based on health status when determining eligibility to enroll in a group health plan or to obtain related insurance or in deciding the amount of premium to be charged to similarly situated individuals. Employers may not be denied continued access to multiemployer plans, or multiple employer welfare arrangements, except for certain reasons set forth in HIPAA.

HIPAA and Related Acts amended three federal statutes: the Code, administered by the Treasury through IRS; ERISA, administered by DOL through PWBA; and the PHS Act, administered by HHS through HCFA. Under the Code, as amended by HIPAA and Related Acts, the Treasury has authority over group health plans (including church plans) and their sponsors, and IRS enforced the requirements of HIPAA and Related Acts through the imposition of an excise tax. Under ERISA, as amended by HIPAA and Related Acts, DOL has increased authority over group health plans that are subject to Part 7 of subtitle B of Title I of ERISA. Health insurance issuers offering health insurance coverage in connection with such plans are also subject to Part 7. However, in accordance with the provisions of HIPAA, only participants and beneficiaries (and not DOL) may bring an enforcement action against health insurance issuers under Part 7.

Under the PHA Act, as amended by HIPAA and Related Acts, HCFA has authority over health insurance issuers and nonfederal governmental plans. If a State fails to substantially enforce Parts A and B of Title XXVII of the PHS Act, or requests that HCFA enforce the provisions or requirements, HCFA enforces the group and individual market requirements by imposing a civil monetary penalty on issuers that fail to comply with HIPAA's requirements in that State.

There are differences in some of the amendments that HIPAA and Related Acts made to the three statutes. In some instances, changes were made to only one of the federal statutes with no counterpart in the other two statutes. Section 104 of HIPAA requires the Secretaries of the Treasury, Labor and HHS to coordinate in the areas of parallel responsibility relating to the share provisions of HIPAA.

Article V

Scope of Work

The Departments agree to assign representatives to work closely to ensure that all Interpretations, Regulations and enforcement strategies relating to shared provisions of Subtitle A of Title I and section 401 of Title IV of HIPAA and Related Acts will be developed and implemented in a coordinated manner. All such Interpretations, Regulations and enforcement strategies will be administered in a manner that promotes consistency in effect, that avoids duplication of enforcement efforts, and that reflects consideration of the appropriate priorities in enforcement.

In this regard, the Departments will continue to work together closely through regular joint meetings and frequent consultation, consistent with the process (i.e., by mutual consent) that has been used in developing existing Regulations and Interpretations under HIPAA and Related Acts. Similarly, DOL and HHS will continue to work together closely through regular joint meetings and frequent consultation to develop Regulations and Interpretations under WHCRA.

In order to further effectuate this coordination, the Treasury, IRS, DOL, and HHS each will name a "Department Designee" to serve on a Coordinating Committee. The Committee's task will be to ensure the identification and coordination of policies involving areas of shared responsibility under HIPAA and Related Acts to maintain consistency in the application of these provisions that amend the Code, ERISA, and the PHS Act.

The Committee also will take steps to maximize the efficiency of Agency enforcement efforts, including developing the terms of further agreement(s), as necessary. The Committee members shall meet, quarterly, or at such times as they may agree, to review and discuss relevant pending Regulations and Interpretations to evaluate whether the position(s) set forth therein reflect a coordinated position. Committee meetings will be held at locations agreed to by the Committee members. Upon agreement of the Committee members, such meetings may be held by conference call. Each Department will assume the costs associated with the participation of its respective Committee members.

Timely and prompt consensus will be sought in the development and administration of all Interpretations affected by this MOU. Any Department Designee can bring any matter subject to the MOU before the Committee. The Department Designees serving on the Committee will attempt to reach consensus on issues within 45 days (except in unusual circumstances) after such issues have been formally presented (including a written summary) at a meeting of the Committee. If consensus on particular issues is reached by the members of the Committee, appropriate clearance will be initiated within each Department.

Article VI

Coordinated Enforcement Strategy

Generally, the Departments intend to continue the current informal arrangements that have developed for cooperation and collaboration in the handling of inquiries arising under HIPAA, MHPA, NMHPA, and WHCRA. In addition, pursuant to Section 104(2) of HIPAA and this MOU, the Committee, and any appropriate individuals designated by the Agencies or Departments, shall develop a coordinated enforcement strategy that avoids duplication of enforcement efforts and assigns priorities in enforcement. The Agencies or Departments shall first designate, within six months of the execution of this MOU, individuals who are to work with the Committee in developing the enforcement strategy. This group shall also devise a written operational agreement for the sharing of information that is related to enforcement cases among the Departments. Moreover, the operational agreement may address procedures for the referral of cases, the development of audit checklists and training materials, and the coordination of public affairs information. The operational agreement may also describe the individuals within each Department who are responsible for implementing the sharing of information.

Subject to applicable legal restrictions (including section 6103 of the Code), the Departments agree, absent exigent circumstances, to notify each other in writing (through the Department Designee) prior to the commencement of any administrative or judicial proceeding on matters within the scope of this MOU and to inform each other of the final action resulting from such proceeding.

Nothing in this section shall be construed to affect the enforcement authority that HIPAA or Related Acts confers on any Department, including enforcement concerning a matter as to which a Department has given or received the information or notice described herein, nor shall this paragraph be construed to preclude the Departments from agreeing to different arrangements on a case by case basis.

Article VII

Confidentiality of Information

The Departments agree that any information shared or disclosed pursuant to this MOU will be held in strict confidence and may be used only for purposes consistent with this MOU or as otherwise permitted by law. All requests by parties other than the Departments for disclosure of information shall be coordinated with the Agency that initially compiled or collected the information, provided that no Agency shall disclose information initially compiled by another Agency to the public without the approval of the appropriate Agency or Department unless the Agency is required by law to do so (e.g., Freedom of Information Act (FOIA), 5 U.S.C. 552; Federal Advisory Committee Act (FACA), 5 U.S.C. App. 2), in which event it will notify the appropriate Department or Agency in writing of its intent to disclose such information. Nothing in this MOU shall be deemed to confer rights on any party other than the Departments as a result of any act or omission by any Agency or Department with respect to its obligations under this MOU.

Article VIII

Duration of Agreement

This MOU will become effective upon the date of the final signature and may be amended by written agreement of the undersigned. It will remain in effect until amended by the parties, or until terminated by any of the parties upon 30 days written notice to the other parties and, upon the agreement of the Departments, shall apply to Subsequent Legislation.

Article IX

Officials Responsible for MOU

The appropriate Departmental officials will appoint their respective Department Designees to the Committee within 30 days after the signing of this MOU and will appoint any successors in a timely manner.

We, the undersigned, do hereby agree to the foregoing provisions of this MOU.

Dated: April 8, 1999.
Donald C. Lubick,
Assistant Secretary for Tax Policy, Department of the Treasury.

We, the undersigned, do hereby agree to the foregoing provisions of this MOU.

Dated: April 21, 1999.
Robert E. Wenzel,
Deputy Commissioner, Internal Revenue Service, Department of the Treasury.

We, the undersigned, do hereby agree to the foregoing provisions of this MOU.

Dated: March 17, 1999.
Richard M. McGahey,
Assistant Secretary, Pension and Welfare Benefits Administration, Department of Labor.

We, the undersigned, do hereby agree to the foregoing provisions of this MOU.

Dated: March 30, 1999.
Nancy-Ann Min DeParle,
Administrator, Health Care Financing Administration, Department of Health and Human Services.

Footnotes

(Figure 1)
Memorandum Of Understanding
Between The Office Of Inspector General And LMSA

Signed this 24^th day of March 1980.

For the Office of Organized
Crime and Racketeering
Office of Inspector General

For the Pension and Welfare
Benefit Programs
Labor-Management Relations Service

/s/ Ronald Goldstock
Deputy Inspector General

/s/ Ian D. Lanoff
Administrator

(Figure 1)
Interagency Agreement

Procedures for Cooperation Between the Federal Financial Institution Regulatory Agencies and the Department of Labor in the Enforcement of the Employee

The Board of Governors of the Federal Reserve System, Federal Deposit Insurance Corporation, National Credit Union Administration, the Office of the Comptroller of the Currency, and Office of Thrift Supervision (the federal financial institution regulatory agencies) as part of their supervision of the institutions regulated by them, conduct examinations and perform other functions which occasionally disclose violations of the Employee Retirement Income Security Act of 1974 (ERISA). The Department of Labor (DOL) is charged with the administration, interpretation, and enforcement of standards of conduct and responsibility of fiduciaries of employee benefit plans under ERISA.

Section 3004(b) of ERISA provides that the Secretary of Labor may utilize the facilities or services of any department, agency, or establishment of the United States, with the lawful consent of such department, agency, or establishment; and each department, agency or establishment of the United States is authorized and directed to cooperate with the Secretary of Labor and, to the extent permitted by law, to provide such information and facilities as the Secretary may request for his assistance in the performance of his functions under ERISA. This agreement is executed pursuant to that authority.

For The Federal Financial Institution Regulatory Agencies

Date: February 23, 2006
/s/ Jennifer J. Johnson
Secretary
Board of Governors of the Federal Reserve System

Date: March 1, 2006
/s/ David M. Marquis
Director, Office of Examination and Insurance
National Credit Union Administration

Date: February 8, 2006
/s/ Scott M. Albinson
Managing Director
Examinations, Supervision and Consumer Protection
Office of Thrift Supervision

Date: February 8, 2006
/s/ Christopher J. Spoth
Acting Director
Division of Supervision and Consumer Compliance
Federal Deposit Insurance Corporation

Date: February 13, 2006
/s/ Emory W. Rushton
Senior Deputy Comptroller
and Chief National Bank Examiner
Office of the Comptroller of the Currency

For the Department of Labor

January 26, 2006
/s/ Ann L. Combs
Assistant Secretary of Labor
Employee Benefits Security Administration

(Figure 2)
The Federal Financial Institutions Regulator Agencies And Their Supervised Institutions

The Board Of Governors Of The Federal Reserve System (FRB)

examines, supervises, and regulates state member banks, bank holding companies, and Edge and agreement corporations; approves or denies applications for mergers, acquisitions and change in control by state member banks and bank holding companies; and
approves or denies applications for foreign operations of member banks and has residual supervisory responsibility for U.S. offices of foreign banks.

Implementation of policy decisions is carried out by the FRB and by the twelve Federal Reserve Banks, each of which has operational responsibility within a specific geographical area. Each Reserve Bank has a president and other officers and employs a staff of bank examiners who examine state member banks and inspect bank holding companies located within the Reserve Bank's district. All national banks must be members of the Federal Reserve System. State-chartered banks may apply and be accepted for membership.

The Federal Deposit Insurance Corporation (FDIC)

provides deposit insurance for commercial banks, certain federal savings banks, and state-chartered savings banks;
supervises FDIC-insured, state-chartered commercial and savings banks that are not members of the Federal Reserve System; and
serves as receiver or liquidator of all closed national banks and as receiver of closed insured state-chartered banks.

The bank supervision functions of the FDIC are shared with state and other federal authorities. All national banks and state banks that are members of the Federal Reserve System must be insured by the FDIC. Nonmember state banks may apply for FDIC deposit insurance. The FDIC examines and supervises those banks under its purview, approves or denies applications for structural or corporate changes, and rules on applications for insurance.

The FDIC is organized geographically into nine regions, each of which is headed by a regional director.

The Office Of Thrift Supervision (OTS)

Effective July 21, 2011, the Office of Thrift Supervision (OTS) merged with the Office of the Comptroller of the Currency (OCC).

The National Credit Union Administration (NCUA)

The purpose of the NCUA is to charter, examine, supervise, and insure the nation's nearly 10,000 federal credit unions. In addition, NCUA also provides insurance for member accounts at 4,980 state-chartered credit unions.

The major responsibilities of the NCUA are:

chartering, supervising, and examining federal credit unions;
administering the National Credit Union Share Insurance Fund (NCUSIF); and
managing the Central Liquidity Facility.

The NCUA also has statutory authority to examine and supervise NCUSIF-insured, state-chartered credit unions, which it does in coordination with state agencies.

The NCUA has five regions in addition to the Office of National Examinations and Supervision.

The Office Of The Comptroller Of The Currency (OCC)

The OCC is the regulator and supervisor of the national banking system and federal savings associations. The OCC is the only federal banking agency with authority to charter commercial banks. The OCC has authority to approve or deny applications for new bank charters, the establishment of branches, and mergers of national banks.

The principal supervisory tools of the OCC are on-site supervisory activities and detailed off-site analysis of national bank and federal savings association operations. As appropriate, the OCC issues rules and regulations concerning bank lending, bank investment, and other aspects of bank operations.

The OCC is organized geographically into six districts, each headed by a Deputy Comptroller.

(Figure 3)
Memorandum Of Understanding Concerning Cooperation Between
The U.S. Securities and Exchange Commission and The U.S. Department of Labor

To facilitate the ongoing consultation and communication between the U.S. Department of Labor's Employee Benefits Security Administration (DOL) and the U.S. Securities and Exchange Commission (SEC) concerning matters of mutual interest, the agencies have reached this Memorandum of Understanding (MOU) setting forth a framework for consultation and exchange of information. By this MOU, the agencies formally recognize their effective and informal working relationships and their expectation of continued cooperation.

/S/ Thomas E. Perez
Secretary of Labor
07/25/2013

/S/ Mary Jo White, Chair
Securities and Exchange Commission
07/29/2013

(Figure 4)
SEC Access Request Letter

Re: [Name of investigation]

Dear :

We request access to the investigative and other non-public files of the U.S. Securities and Exchange Commission (the "Commission") related to the captioned matter. This request is made in connection with an ongoing lawful investigation or official proceeding inquiring into a violation of, or failure to comply with, a criminal or civil statute or regulation, rule or order issued pursuant thereto, being conducted by the [insert region or district] Office of the Employee Benefits Security Administration.

[We understand that the files in this matter contain "financial records" of "customers" as those terms are defined in the Right to Financial Privacy Act 011978 (12 U.S.C. §§3401-22). We have reason to believe that that information is relevant to our investigation and/or proceeding.]⁽¹⁾

We will establish and maintain such safeguards as are necessary and appropriate to protect the confidentiality of files to which access is granted and information derived therefrom. The files and information may, however, be used for the purpose of our investigation and/or proceeding, and any resulting proceedings. They also may be transferred to criminal law enforcement authorities. We shall notify you of any such transfer and use our best efforts to obtain appropriate assurances of confidentiality.

Other than as set forth in the preceding paragraph, we will:

make no public use of these files or information without prior approval of your staff;
notify you of any legally enforceable demand for the files or information prior to complying with the demand, and assert such legal exemptions or privileges on your behalf as you may request; and
not grant any other demand or request for the files or information without prior notice to and lack of objection by your staff.

[We recognize that until this matter has been closed, the Commission continues to have an interest and will take further investigatory or other steps as it considers necessary in the discharge of its duties and responsibilities.]⁽²⁾

Should you have any questions, please contact [insert contact name].

Sincerely,
Regional Director

Footnotes

This paragraph is necessary only when the files contain RFPA material.
This paragraph may be omitted if the Commission's case is closed.

¹ The VFCP does require applicants to correct participant loan problems under the Voluntary Correction Program of the IRS’ Employee Plans Compliance Resolution System (EPCRS) and receive their approval before applying under the program.

(Figure 1)
No Action Letter

Applicant
Address

RE: VFCP Application No. xx-xxxxxxx

Dear Applicant:

The Department of Labor, Employee Benefits Security Administration (EBSA), has responsibility for administration and enforcement of Title I of the Employee Retirement Income Security Act of 1974, as amended (ERISA). EBSA has established a Voluntary Fiduciary Correction Program (VFCP) to encourage the correction of breaches of fiduciary responsibility and the restoration of losses to the plan participants and beneficiaries.

In accordance with the requirements of the VFCP, you have identified the following transactions as breaches, or potential breaches, of part 4 of Title I of ERISA, and you have submitted documentation to EBSA that demonstrates that you have taken the corrective action indicated.

[Briefly recap the violation and correction. Example: Failure to deposit participant contributions to XYZ Corp. 401(k) plan within the time frames required by ERISA, from (date) to (date). All participant contributions were deposited by (date) and lost earnings on the delinquent contributions were deposited and allocated to participants' plan accounts on (date).]

Because you have taken the above-described corrective action that is consistent with the requirements of the VFCP, EBSA will take no civil enforcement action against you with respect to this breach. Specifically, EBSA will not recommend that the Solicitor of Labor initiate legal action against you, and EBSA will not impose the penalty in section 502(l) [or section 502(i)](1) of ERISA on the amount you have repaid to the plan.

EBSA's decision to take no further action is conditioned on the completeness and accuracy of the representations made in your application. You should note that this decision will not preclude EBSA from conducting an investigation of any potential violations of criminal law in connection with the transaction identified in the application or investigating the transaction identified in the application with a view toward seeking appropriate relief from any other person.

[If the transaction is a prohibited transaction for which no exemptive relief is available, add the following language: Please also be advised that pursuant to section 3003(c) of ERISA, 29 U.S.C. Section 1203(c), the Secretary of Labor is required to transmit to the Secretary of Treasury information indicating that a prohibited transaction has occurred. Accordingly, this matter will be referred to the Internal Revenue Service.]

In addition, you are cautioned that EBSA's decision to take no further action is binding on EBSA only. Any other governmental agency, and participants and beneficiaries, remain free to take whatever action they deem necessary.

We are pleased you have taken the opportunity to correct the identified transactions, and encourage you to review all of your employee benefit plans to determine if there are any other violations you should correct. We have enclosed a list of all eligible transactions for your benefit.

If you have any questions about this letter, you may contact the Regional VFCP Coordinator at applicable address and telephone number.

Sincerely,
Regional Director (or designated person)

Enclosure

Covered Transactions in the Voluntary Fiduciary Correction Program

Delinquent Participant Contributions and Participant Loan Repayments to Pension Plans
Delinquent Participant Contributions to Insured Welfare Plans
Delinquent Participant Contributions to Welfare Plan Trusts
Fair Market Interest Rate Loans With Parties in Interest
Below Market Interest Rate Loans With Parties in Interest
Below Market Interest Rate Loans With Non-Parties in Interest
Below Market Interest Rate Loans Due to Delay in Perfecting Security Interest
Participant Loans Failing to Comply with Plan Provisions for Amount, Duration, or Level Amortization
Defaulted Participant Loans
Purchase of Assets by Plans from Parties in Interest
Sale of Assets by Plans to Parties in Interest
Sale and Leaseback of Property to Sponsoring Employers
Purchase of Assets from Non-Parties in Interest at More Than Fair Market Value
Sale of Assets to Non-Parties in Interest at Less Than Fair Market Value
Holding of an Illiquid Asset Previously Purchased by Plan
Benefit Payments Based on Improper Valuation of Plan Assets
Payment of Duplicate, Excessive, or Unnecessary Compensation
Improper Payment of Expenses by Plan
Payment of Dual Compensation to Plan Fiduciaries

(Figure 2)
VFCP Checksheet

Use this checklist to ensure that you are submitting a complete application. The applicant must sign and date the checklist and include it with the application. Indicate "Yes", "No" or "N/A" next to each item. A "No" answer or the failure to include a completed checklist will delay review of the application until all required items are received.

Signature of Applicant and Date Signed: _____________________________________________

Name of Applicant: ______________________________________________________________

Title/Relationship to the Plan: ______________________________________________________

Name of Plan, EIN and Plan Number: ________________________________________________
______________________________________________________________________________

(Figure 3)
Penalty of Perjury Statement

"Under penalties of perjury I certify that I am not Under Investigation (as defined in VFCP Section 3(b)(3)) and that I have reviewed this application, including all supporting documentation, and to the best of my knowledge and belief the contents are true, correct, and complete."

_______________________________________________________________________________
Name and Title

Signature ___________________________________________________________________

Date ___________________

_______________________________________________________________________________
Name and Title

Signature ___________________________________________________________________

Date ___________________

Footnotes

The VFCP does require applicants to correct participant loan problems under the Voluntary Correction Program of the IRS’ Employee Plans Compliance Resolution System (EPCRS) and receive their approval before applying under the program.

Administrative Procedures

(Figure 1)
18 U.S.C. 1905. Disclosure of Confidential Information Generally

Whoever, being an officer or employee of the United States or of any department or agency thereof, any person acting on behalf of the Federal Housing Finance Agency, or agent of the Department of Justice as defined in the Antitrust Civil Process Act (15 U.S.C. 1311-1314), or being an employee of a private sector organization who is or was assigned to an agency under chapter 37 of title 5, publishes, divulges, discloses, or makes known in any manner or to any extent not authorized by law any information coming to him in the course of his employment or official duties or by reason of any examination or investigation made by, or return, report or record made to or filed with, such department or agency or officer or employee thereof, which information concerns or relates to the trade secrets, processes, operations, style of work, or apparatus, or to the identity, confidential statistical data, amount or source of any income, profits, losses, or expenditures of any person, firm, partnership, corporation, or association; or permits any income return or copy thereof or any book containing any abstract or particulars thereof to be seen or examined by any person except as provided by law; shall be fined under this title, or imprisoned not more than one year, or both; and shall be removed from office or employment.

(Figure 2)
Notice of Transfer of Financial Records

Dear (Name of Customer):

Copies of, or information contained in, your financial records lawfully in the possession of the Employee Benefits Security Administration, U.S. Department of Labor, have been furnished to ____________________________ (Government Agency) pursuant to the Right to Financial Privacy Act of 1978 for the following purpose(s):

If you believe that this transfer has not been made to further a legitimate law enforcement inquiry, you may have legal rights under the Right to Financial Privacy Act of 1978 or the Privacy Act of 1974.

Sincerely,
Regional Director

(Figure 3)
Unauthorized Disclosure of Information

Sec. 7213(a)(1) [Internal Revenue Code of 1986]

Federal employees and other persons -- It shall be unlawful for any officer or employee of the United States or any person described in section 6103(n) (or an officer or employee of any such person), or any former officer or employee, willfully to disclose to any person, except as authorized in this title, any return or return information (as defined in section 6103(b)). Any violation of this paragraph shall be a felony punishable upon conviction by a fine in an amount not exceeding $5,000, or imprisonment of not more than 5 years, or both, together with the costs of prosecution, and if such offense is committed by any officer or employee of the United States, he shall, in addition to any other punishment, be dismissed from office or discharged from employment upon conviction for such offense.

Civil Damages for Unauthorized Inspection or Disclosure of Returns and Return Information

Sec.7431(a)(1) [Internal Revenue Code of 1986]

Inspection or disclosure by employee of United States -- If any officer or employee of the United States knowingly, or by reason of negligence, inspects or discloses any return or return information with respect to a taxpayer in violation of any provision of section 6103, such taxpayer may bring a civil action for damages against the United States in a district court of the United States.

(Figure 4)

Internal Revenue Service
Manager, EP Classification
31 Hopkins Plaza
Room 1550
Baltimore, MD 21201

RE: Name and address of plan
EIN/PN
EBSA Case No.

Dear _____________________:

In connection with the administration of Title I of the Employee Retirement Income Security Act of 1974 (ERISA), and a current investigation conducted by the Employee Benefits Security Administration (EBSA) it is requested that you make the documents listed in the attached available to this office, pursuant to section 6103(l)(2) of the Internal Revenue Code.

I would appreciate your furnishing the requested documents and, if necessary, discussing their contents with the following individuals of the Department of Labor (select as appropriate and state proper names):

Regional Office, EBSA

Regional Director
Deputy Regional Director
District Supervisor
Supervisory Investigator
Investigator/Auditor

National Office, EBSA

Director of Enforcement
Chief, Division of Field Operations and Support, Office of Enforcement
Chief, Division of Criminal Investigations, Office of Enforcement
Investigator/Auditor

Office of the Solicitor

Solicitor
Associate Solicitor, Plan Benefits Security Division (PBSD)
Deputy Associate Solicitor, PBSD
Counsel for Regulations, PBSD
Counsel for General Litigation, PBSD
Counsel for Fiduciary Litigation, PBSD
Counsel for Appellate and/or RSOL Decentralized Litigation, PBSD
Staff Attorney, PBSD
Regional Solicitor
Staff Attorney, RSOL

This information is necessary and is being requested for the purpose of the administration of Title I of ERISA. It is understood that the information furnished by the Internal Revenue Service will be used strictly in accordance with, and subject to the limitations of, the disclosure provisions of the Internal Revenue Code pertaining to confidentiality and taxpayer rights to privacy. The Department of Labor representatives are also aware of the penalty provisions of section 7213 of the Internal Revenue Code and section 1905 of Title 18 of the United States Code with respect to their use of this information.

Sincerely,
Regional Director/District Supervisor

cc: Director of Enforcement

Attachment to Request for Federal Tax Returns

At this time, a request is hereby made for IRS transcripts of the tax information/forms listed below.

Or

A request is hereby made for copies of the tax information/forms listed below. These copies are being requested rather than transcripts because of (Investigators should enter court proceedings, other imminent events and related dates).

Taxpayer Name:

Taxpayer Address:

Taxpayer TIN (SSN or EIN):

Federal Tax Information/Form Requested:

Plan/Tax Year(s) Requested:

Taxpayer Name:

Taxpayer Address:

Taxpayer TIN (SSN or EIN):

Federal Tax Information/Form Requested:

Plan/Tax Year(s) Requested:

Taxpayer Name:

Taxpayer Address:

Taxpayer TIN (SSN or EIN):

Federal Tax Information/Form Requested:

Plan/Tax Year(s) Requested:

Attachment to Request for IRS Reports, Correspondences & Documents

A request is hereby made for copies of the following reports and/or correspondences for the plan/sponsor/fiduciary listed below: [Choose from below as applicable.] (Investigators should provide as much detail as known, such as IRS agent name, and IRS division or group.)
1. Any reports, reports of investigation or interview, or memoranda related to the below-referenced plan, its sponsor or fiduciaries and any work papers related thereto or related to any audit of the above-referenced plan or its sponsors, including, but not limited to, any conclusive findings developed by the IRS Office as a result of its investigation and review. The reports of investigation, interviews or memoranda requested include information relating to any exclusive benefit rule/fiduciary disqualification of the plan.
2. Any correspondence or memoranda reflecting communications between the IRS and the below-referenced plan, its sponsors or its fiduciaries in regard to any of the above, including, but not limited to, any tax exempt status and IRS responses.
3. Reports or documents of any nature, plus attachments, filed by or obtained from the below-referenced plan, its sponsors, its fiduciaries, and any other persons affiliated with the above-referenced plan.
[Complete the appropriate items below.]

Plan/Sponsor/Fiduciary Name:

Address:

Taxpayer TIN (SSN or EIN):

Plan/Tax Year(s) Requested (if known):

Plan/Sponsor/Fiduciary Name:

Address:

Taxpayer TIN (SSN or EIN):

Plan/Tax Year(s) Requested (if known):

Plan/Sponsor/Fiduciary Name:

Address:

Taxpayer TIN (SSN or EIN):

Plan/Tax Year(s) Requested (if known):

Plan/Sponsor/Fiduciary Name:

Address:

Taxpayer TIN (SSN or EIN):

Plan/Tax Year(s) Requested (if known):

Plan/Sponsor/Fiduciary Name:

Address:

Taxpayer TIN (SSN or EIN):

Plan/Tax Year(s) Requested (if known):

Footnotes

ERISA §504

Footnotes

Database instructions are contained in a separate manual.

(Figure 1)
Outline for Civil Investigation Report of Interview
(See EBSA Form 202)

[Date of Interview]

[Interviewee] was interviewed at [interview location] on the above date at [time] am/pm by Investigator/Auditor [Inv/Aud Name]. (Include if applicable) Also present during the interview was [names, titles].

[Interviewee or Attendees ] was/were advised that the writer is conducting an official investigation for the Employee Benefits Security Administration, U.S. Department of Labor, pursuant to the authority granted under the Employee Retirement Income Security Act of 1974.

[Interviewee] was further advised that the writer was requesting his/her voluntary cooperation, and that any information obtained during this official investigation which might involve violations of other laws, civil or criminal, would be referred to the U.S. Department of Justice or other appropriate agency.

In response to questioning, [Interviewee] provided the following information.

The first paragraph should contain background information regarding the interviewee, which may bear upon his/her credibility, such as: address, social security number, title, duties and responsibilities, and length of service in the current position.
Organize subsequent paragraphs chronologically or topically, and must be written, as much as possible, in the words of the interviewee. Avoid words or terminology that are unfamiliar to the interviewee. Use section headings when appropriate to identify discussion topics.
Clearly identify sources of all information. Make clear whether (or not) the interviewee has first-hand knowledge of the information he/she is providing. If the information comes from another source, identify the other source.
Clearly identify any document shown to, or provided by, the witness during the interview. If there is any possibility of confusion, attach copies of the relevant documents to the RI.
If applicable, identify any other Investigator/Auditor or counsel present at the interview.

(Figure 2)
Outline for Criminal Investigation Report of Interview
Witness or Non-Custodial Subject
(See EBSA Form 202A)

Date of Interview

[Interviewee] was further advised that the writer was requesting his/her voluntary cooperation, and that any information obtained during this official criminal investigation may be referred to the U.S. Department of Justice or other appropriate agency for consideration.

In response to questioning, [Interviewee] provided the following information.

The first paragraph should contain background information regarding the interviewee that may bear upon his/her credibility, such as address, social security number, title, duties and responsibilities, and length of service in the current position.
Organize subsequent paragraphs either chronologically or topically and must be written, as much as possible, in the words of the interviewee. Avoid words or terminology that are unfamiliar to the interviewee.
Clearly identify sources of all information. Make clear whether (or not) the interviewee has first-hand knowledge of the information he/she is providing. If information comes from another source, identify the other source.
Clearly identify any document shown to, or provided by, the witness during the interview. If there is any possibility of confusion, attach copies of the relevant documents to the RI.
If applicable, identify any other Investigator/Auditor or counsel present at the interview.

(Figure 3)
Advisement of Rights

Place ____________________

Date ____________________

Time ____________________

You must understand your rights before we ask you any questions.

You do not have to make any statement or answer any questions.

Any statement you make or answers you give may be used against you in a court of law or other proceedings.

You have the right to talk to a lawyer for advice before you answer any questions and you have the right to have a lawyer present during the interview.

If you decide to answer questions now without a lawyer present, you still have the right to stop the interview at any time.

Waiver of Rights

I have read this statement of my rights and it has been read to me, and I understand what my rights are. I am willing to make a statement and answer questions. I do not want a lawyer present at this time. I understand and know what I am doing. No promises or threats have been made to me and no pressure or coercion of any kind has been used against me. I hereby voluntarily and intentionally waive my rights.

Date ____________________

Signature ____________________

Time ____________________

Certification

I hereby certify that the foregoing Warning and Waiver of Rights were read by me to the above signatory, and that he/she also read it and has affixed his/her signature hereto in my presence.

Signature ____________________

Witness ____________________

(Figure 4)
Outline for Criminal Report of Interview
Custodial Subject
(See EBSA Form 202B)

Date of Interview

[Interviewee or Attendees] was/were advised that the writer is conducting an official criminal investigation for the Employee Benefits Security Administration, U.S. Department of Labor, pursuant to the authority granted in the Employee Retirement Income Security Act of 1974, as amended. [Interviewee] was further advised that the writer was requesting his/her voluntary cooperation. [Interviewee] was warned that he/she must understand his/her rights before any questions were asked. [Interviewee] was told that he/she does not have to make any statement or answer any questions; that any statement he/she makes or any answers he/she gives may be used against him/her in a court of law or other proceedings; that he/she has the right to talk to a lawyer for advice before he/she answers any questions and that he/she has the right to have a lawyer present during the interview; further, [Interviewee] was told that if he/she decides to answer questions without a lawyer present, that he/she still has the right to stop the interview at any time. After being warned, [Interviewee] agreed to being interviewed. [Interviewee] signed the waiver of rights/refused to sign the waiver of rights (circle one).

In response to questioning, [Interviewee] provided the following information.

The first paragraph(s) should contain background information regarding the interviewee, which would tend to bear upon his/her credibility, such as title, duties and responsibilities, and length of service in current position.
Organize subsequent paragraphs either chronologically or topically and must be written, as much as possible, in the words of the interviewee. Avoid words or terminology that are unfamiliar to the witness.
Clearly identify all sources of all information. Make clear whether (or not) the witness has first-hand knowledge of the information he/she is providing. If the information comes from another source, identify the other source.
Clearly identify any document shown to, or provided by, the witness during the interview. If there is any possibility of confusion, attach copies of the relevant documents to the RI.
If applicable, identify any other Investigator/Auditor or counsel present at the interview.

(Figure 5)
Civil Investigation Report of Interview with Signed Statement

Date of Interview

[Interviewee] was interviewed at [interview location] on the above date at [time] am/pm by Investigator/Auditor [Inv/Aud Name] was advised that the writer is conducting an official investigation for the Employee Benefits Security Administration, U.S. Department of Labor, pursuant to the authority granted in the Employee Retirement Income Security Act of 1974, as amended.

[Interviewee] agreed to cooperate and provide the attached signed statement.

[Any information obtained that is not in the signed statement, should be included in the RI. If the interviewee refuses to sign a prepared statement, ask him/her to read it orally, acknowledge whether it is true or correct, and record his/her comments in the RI.]

(Figure 6)
Format for Criminal Investigation Report of Interview Witness or Non-Custodial Subject

Date of Interview

[Interviewee] was interviewed at [interview location] on the above date at [time] am/pm by Investigator/Auditor [Inv/Aud Name].

[Interviewee] was advised that the writer is conducting an official criminal investigation for the Employee Benefits Security Administration, U.S. Department of Labor, pursuant to the authority granted in the Employee Retirement Income Security Act of 1974, as amended.

[Interviewee] agreed to cooperate and provided the attached signed statement.

(Figure 7)
Format for Criminal Investigation Report of Interview
Custodial Subject with Signed Statement

Date of Interview

[Interviewee] was interviewed at [interview location] on the above date at [time] am/pm by Investigator/Auditor [Inv/Aud Name]. [Interviewee] was advised that the writer is conducting an official criminal investigation for the Employee Benefits Security Administration, U.S. Department of Labor, pursuant to the authority granted in the Employee Retirement Income Security Act of 1974, as amended.

[Interviewee] was further advised that the writer was requesting his/her voluntary cooperation. [Interviewee] was warned that he/she must understand his/her rights before any questions were asked. [Interviewee] was told that he/she does not have to make any statement or answer any questions; that any statement he/she makes or any answers he/she gives might be used against him/her in a court of law or other proceedings; that he/she has the right to talk to a lawyer for advice before he/she answers any questions and that he/she has the right to have a lawyer present during the interview; further, was told that if he/she decides to answer questions without a lawyer present that he/she still has the right to stop the interview at any time. After being warned, [Interviewee] agreed to being interviewed. [Interviewee] signed the waiver of rights/refused to sign the waiver of rights (circle one).

[Interviewee] agreed to cooperate and provided the attached signed statement.

(Figure 8)
Format and Guide For A Signed Statement

(Preface for Civil Program Witness or Subject)

(Preface for Criminal Investigation Witness or Non-Custodial Subject)

(Preface for Criminal Investigation Custodial Subject)

I, [full name of interviewee, home and work addresses and telephone numbers], make the following voluntary statement to Investigator/Auditor ____________________. I was advised that Investigator/Auditor ____________________________ is conducting an official criminal investigation for the Employee Benefits Security Administration, U.S. Department of Labor, pursuant to authority granted in the Employee Retirement Income Security Act of 1974, as amended. I was further advised that Investigator/Auditor ____________________ was requesting my voluntary cooperation. I was told that I do not have to make any statement or answer any question; that any statement I make or any answer I give may be used against me in a court of law or other proceedings; that I have the right to talk to a lawyer for advice before I answer any question and that I have the right to have a lawyer present during the interview; further, I was told that if I decide to answer questions without a lawyer present, that I still have the right to stop the interview at any time.

(Body of the Statement)

The first paragraph(s) should contain background information regarding the witness/subject that will tend to establish his/her credibility. This should include, under certain circumstances, the date and place of the witness's/subject's birth and highest educational level he/she attained.
Organize subsequent paragraphs either chronologically or topically and must be, as much as possible, in the words of the interviewee.
Clearly identify the sources of all information. It should be clear from the signed statement whether (or not) the interviewee has first-hand knowledge of the information he/she is providing. If the information comes from a source other than what the interviewee saw and/or heard him/herself, identify that source.
Interviewee must make and initial all additions and deletions in the body of the report.
All pages must be numbered. The interviewee must place his/her initials next to the last word in the last line of the last paragraph on each page.
Do not leave any space between paragraphs.

(Attestation)

I have read the above statement consisting of ____________________ pages. Each page is numbered, and I have initialed each correction. I declare (or certify, verify, or state) under penalty of perjury that the statement is true and correct.

/s/ ____________________ Date ____________________

Witnessed:

____________________ Investigator/Auditor Date ____________________

If possible, have the interviewee write out the attestation in his/her own hand.
The signature of the maker should be the same as the name identifying him/her in the heading of the statement.

Footnotes

"Witness" includes the Subject in a criminal case.
This is to prevent subsequent insertions or deletions. Additionally, if the statement is hand-written, there should be no space left between paragraphs nor in the width of each page.

(Figure 1)
Listing of Some Categories of Workpapers

Employee Health and Welfare Benefit Funds

Contributions
Payroll Audits
Bonding
Premium Deposits and Refunds
Insurance Premium and Related Liabilities
Claim Payments
Liability for Claims
Liability for Accumulated Eligibility Credits
Actuarial Reports
Restrictions on Fund Balance and Contingencies
Administrative Expenses
Other Audit Considerations
1. Review of tax returns
2. Collective bargaining agreements

Pension Funds

Contributions
1. Multiemployer Funds
2. Single Employer Funds
Payroll Audits
Bonding
Investments
Assets held by an Insurance Company
Actuarially Determined Present Value of Accrued Benefits
Benefit Payments
Administrative Expenses
Other Audit Considerations
1. Review of tax returns
2. Collective bargaining agreements

The list illustrates how easily the program may be expanded or contracted as deemed necessary in the judgment of the I/A.

(Figure 1)
Model Letter Accompanying Subpoena
Where Only Production of Records Is Required

Certified Mail - Return Receipt Requested

Name
Address

Re: Investigation of _________________________
EBSA Case No. XX-XXXXXX

Dear: _________________________

We are conducting an investigation pursuant to §504(a)(1) of the Employee Retirement Income Security Act of 1974 (ERISA). Enclosed is a subpoena that requires you to produce identified documents.

Your personal appearance as requested by the subpoena is not required if the documents are produced by _____. We will inform you at a later date if you will be required to testify.

Please provide the required documents with a cover letter identifying the documents you are producing. In the letter, you should also state whether you conducted a diligent search for the subpoenaed documents and whether the documents you are producing include all of the requested documents. If any identified documents are not furnished, please list those documents and your reason for not producing them.

The subpoena requests that you produce documents in electronic form (Electronically Stored Information (ESI)) if you maintain those documents in electronic form.⁽⁵⁾

You should not construe this inquiry as an indication that any violations of law have occurred or as a reflection upon any person involved in this matter.

If you have any questions concerning your rights and duties, you may wish to consult counsel. If you have any questions concerning the subpoena or the documents required to be produced, including the production of ESI and the appropriate format and media, please call (name of investigator/auditor) at (telephone number).

Sincerely,

Director of Enforcement/Regional Director
Enclosure

(Figure 2)
Model Letter Accompanying Subpoena to Testify Only

Certified Mail - Return Receipt Requested

Name
Address

Re: Investigation of _________________________
EBSA Case No. XX-XXXXXX

Dear: _________________________

We are conducting an investigation pursuant to §504(a)(1) of the Employee Retirement Income Security Act of 1974 (ERISA). Enclosed is a subpoena that requires you to appear to give sworn testimony in connection with that investigation. You are entitled to be accompanied by an attorney if you so desire.

If you have any questions concerning your rights and duties, you may wish to consult counsel. If you have any questions concerning the subpoena, please call (name of Investigator/Auditor) at (telephone number).

Sincerely,

Director of Enforcement/Regional Director
Enclosure

(Figure 3)
Model Letter Accompanying Subpoena for Appearance to Produce Records And Testify

Certified Mail - Return Receipt Requested

Name
Address

Re: Investigation of _________________________
EBSA Case No. XX-XXXXXX

Dear: _________________________

We are conducting an investigation pursuant to §504(a)(1) of the Employee Retirement Income Security Act of 1974 (ERISA). Enclosed is a subpoena that requires you to produce certain documents and to appear to give sworn testimony in connection with that investigation. You are entitled to be accompanied by an attorney if you so desire.

The subpoena requests that you produce documents in electronic form (Electronically Stored Information (ESI)) if you maintain those documents in electronic form.⁽⁶⁾ If any documents called for are not furnished, please list those documents and your reason for not producing them.

Sincerely,

Director of Enforcement/Regional Director
Enclosure

(Figure 4)
Model Letter Accompanying Subpoena Where Attorney Has Agreed To Accept Service

Certified Mail - Return Receipt Requested

Name
Address

Re: Investigation of _________________________
EBSA Case No. XX-XXXXXX

Dear: _________________________

We are conducting an investigation pursuant to §504(a)(1) of the Employee Retirement Income Security Act of 1974 (ERISA). As we discussed on (date), you agreed to accept service for your client, _________________, of the enclosed subpoena, which requires the production of certain documents in connection with that investigation.

A personal appearance pursuant to this subpoena is not required provided your client produces the requested documents by _____. Please include a cover letter identifying the documents that your client is producing. In the letter, you should also state whether your client has conducted a diligent search for the subpoenaed documents, and whether the documents produced include all of the required documents. If any documents called for are not furnished, please list such documents and indicate their location and the reason for not producing them.

The subpoena requests that your client produce documents in electronic form (Electronically Stored Information (ESI)), if your client maintain those documents in electronic form.⁽⁷⁾

If you have any questions concerning the subpoena or the documents required to be produced, including the production of ESI and the appropriate format and media, please call (name of investigator/auditor) at (telephone number).

Sincerely,

Director of Enforcement/Regional Director
Enclosure

(Figure 5)
Model Accommodation Letter Accompanying Subpoena

Certified Mail - Return Receipt Requested

Name
Address

Re: Investigation of _________________________
EBSA Case No. XX-XXXXXX

Dear: _________________________

We are conducting an investigation pursuant to §504(a)(1) of the Employee Retirement Income Security Act of 1974 (ERISA). Enclosed is a subpoena that requires you to produce identified documents in connection with that investigation. Your personal appearance pursuant to this subpoena will not be required provided you produce the requested documents.

We can discuss arrangements to minimize the time and interference with normal day-to-day operations. Instead of producing all of the requested documents at the time and place specified in the subpoena, we can inspect the documents at their present location, pursuant to a written agreement with procedure for access, inspection and copying. We are willing to consider your suggestions to reduce the impact of compliance with our subpoena.

To discuss arrangements for subpoena production, please contact (name of Investigator/Auditor) at (telephone number) by (date). In the absence of an agreement, we will expect full compliance with the subpoena by (date).

Sincerely,

Director of Enforcement/Regional Director
Enclosure

(Figure 6)
United States of America
Department of Labor
Employee Benefits Security Administration

In the Matter of:

XYZ Health and Welfare Fund

)
)
)
)
)

Philadelphia, Pennsylvania
Friday, August 31, 2002

Deposition of Richard R. Roe taken on behalf of the Employee Benefits Security Administration in the above-entitled matter, at the offices of the Department of Labor, Employee Benefits Security Administration, Room M-300, 3535 Market Street, Philadelphia, Pennsylvania, pursuant to notice, beginning at 9:13 a.m., before Janet Jones, a notary public in and for the State of Pennsylvania, when were present on behalf of the respective parties:

For the Department of Labor:

Samantha Smith, Esquire
Office of the Solicitor
Plan Benefits Security Division
200 Constitution Avenue, N.W.
Room N-4611
Washington, D.C. 20210

For Richard R. Roe:

Stephen Johnson, Esquire
Johnson and Martinez
123 Fourth Street
Philadelphia, Pennsylvania 19102

(Figure 7)
Format for Taking Sworn Testimony

This sworn testimony is being taken in the matter of [ case name ] involving an investigation undertaken pursuant to section 504 of the Employee Retirement Income Security Act of 1974 (ERISA), 29 U.S.C. section 1134, to determine whether any person has violated, or is about to violate, any provision of Title I of ERISA or any regulation or order issued thereunder . ERISA section 504(c), 29 U.S.C. section 1134(c), expressly incorporates Sections 9 and 10 of the Federal Trade Commission Act, 15 U.S.C. sections 49 and 50. A copy of this subpoena will be attached to the transcript as Exhibit _________________________.

At this time, I would like to call the witness, and have him/her sworn.

Could you, for the record, please state your name and home address?

Mr./Mrs./Ms./Miss _________________________, are you represented by counsel today?

(If so) Could counsel please identify himself/herself for the record?

(If not) I wish to advise you at this time that you have a right to be accompanied, represented, and advised by counsel. This means that you may have an attorney present and that your attorney can advise you before, during, and after your examination here today. Do you understand that?

Mr./Mrs./Ms./Miss _________________________, are you appearing here today in response to a subpoena issued by the Employee Benefits Administration of the United States Department of Labor?

Mr./Mrs./Ms./Miss _________________________, is that subpoena the document that I have marked as Exhibit __ to this deposition?

[If necessary, describe the subpoena briefly by date, witness, investigation subjects, and examples of any documents sought.]

The principal purpose of your testimony is fact finding, to determine whether violations of ERISA have occurred or may be occurring. However, information that you give may be referred to other governmental agencies if the facts developed constitute violations of other laws.

Mr./Mrs./Ms./Miss _________________________, at this time I would expressly advise you that any evidence or testimony you give may be used against you. You may refuse to answer any question asked you if your answer might tend to incriminate you or subject you to fine, penalty, or forfeiture. This right is guaranteed you by the Fifth Amendment to the Constitution of the United States.

Do you understand what I have just said?

I would like to advise you of the penalty for perjury contained in 18 U.S.C. section 1621, which provides that a person who violates this provision shall be fined as provided under Title 18 or imprisoned for not more than 5 years, or both. An individual is guilty of perjury if, contrary to an oath such as you have just taken, he/she willfully states or subscribes any material matter which he/she does not believe to be true. I also wish to advise you of the penalty contained in 18 U.S.C. section 1001, which provides that anyone who knowingly and willfully makes any materially false statements or representations in any matter within the jurisdiction of any department or agency of the United States shall be fined as provided under Title 18 or imprisoned for not more than 5 years, or both.

Do you understand what I have just said?

I would like to have the record clear that you are appearing here today pursuant to subpoena and that no threats have been made nor have any promises been offered by me or any other official of the Department of Labor to secure your testimony and that no immunity of any kind, either express or implied, can or is being offered in connection with your testimony today. Is that correct?

You or your attorney may purchase a copy of the transcript of your testimony from the court reporter. The court reporter is instructed that the transcript of your testimony shall not be made available to anyone other than the parties here present without the express consent of the Department of Labor.

(Figure 8)

Name of Financial Institution
Address

Re: Name of Investigation
EBSA Case No. XX-XXXXXX

Dear: _________________________

We are conducting an investigation of (subject) pursuant to Title I of the Employee Retirement Income Security Act of 1974. We are sending you the enclosed subpoena, which requires (Name of Financial Institution) to produce the identified documents for our investigation.

We do not believe that the material requested concerns an account maintained in the name of an individual or a partnership of five or fewer individuals. Therefore, the notice requirements of the Right to Financial Privacy Act⁽⁸⁾ do not apply.

If legal counsel for (the Financial Institution) believes that the requirements of the Right to Financial Privacy Act are applicable, we would request immediate identification of the customer to whom we must provide notice.

We are willing to discuss alternative arrangements for production of the requested documents in order to minimize interference with (the Financial Institution's) normal operations. Please contact us with any questions regarding this subpoena.

Thank you for your cooperation in this matter.

Sincerely,

Director of Enforcement/Regional Director
Enclosure

(Figure 9)
United States Department of Labor
Employee Benefits Security Administration
Address Certificate of Compliance with the Right to Financial Privacy Act

To:

Name and Address of Financial Institution

From:

Director of Enforcement/Regional Director
U.S. Department of Labor
Employee Benefits Security Administration
Address

I hereby certify that the applicable provisions of the Right to Financial Privacy Act of 1978, 12 U.S.C. §§3401-3422, have been complied with as to the subpoena presented on (date) for the following financial records of (name):

_________________________
Date

_________________________
Director of Enforcement/Regional Director
U.S. Department of Labor
Employee Benefits Security Administration
Address
Telephone Number

Pursuant to the Right to Financial Privacy Act of 1978, good faith reliance upon this certificate relieves your institution and its employees and agents of any possible liability to the customer in connection with the disclosure of these financial records.

(Figure 10)
United States Department of Labor
Employee Benefits Security Administration
Address Customer Consent and Authorization for Access to Financial Records

I, (Name of Customer), having read the explanation of my rights, which are described below the signature line below in this form, hereby authorize the (Name and Address of Financial Institution) to disclose these financial records:

to (Name of Investigator(s)/Auditor(s)) for the following purpose(s):

I understand that this authorization may be revoked by me in writing at any time before my records, as described above, are disclosed, and that this authorization is valid for no more than three months from the date of my signature.

_________________________
Date

_________________________
(Signature of Customer)

_________________________
(Address of Customer)

Statement of Customer Rights Under the Right to Financial Privacy Act of 1978 Federal law protects the privacy of your financial records. Before banks, savings and loans associations, credit unions, credit card issuers, or other financial institutions may give financial information about you to a federal agency, certain procedures must be followed. The basic elements of these protections and procedures are summarized below.

Consent to Disclosure

You may be asked to consent to a financial institution making your financial records available to the government. You may withhold your consent, and your consent is not required as a condition of doing business with any financial institution. If you give your consent, it can be revoked in writing at any time before your records are disclosed. Furthermore, any authorization you provide is effective for only three months, and your financial institution must keep a record of the instances in which it disclosed your financial information.

Disclosure Without Your Consent

Without your consent, a federal agency that wants to see your financial records may do so ordinarily only by means of a lawful subpoena, summons, search warrant, or formal written request for that purpose.

Generally the federal agency must give you advance notice of its request for your records explaining why the information is being sought and telling you how to object in court. The federal agency must also send you copies of court documents to be prepared by you with instructions for filling them out, if you elect to go to court to challenge such a subpoena, summons, or formal written request. While these procedures will be kept as simple as possible, you may want to consult an attorney before making a challenge to a federal agency request.

Exceptions

In some circumstances, a federal agency may obtain financial information about you without sending advance notice to you as well as without your consent. In most of these cases, the federal agency will be required to go to court for permission to obtain your records without giving you notice beforehand. In these instances, the court will make the government show that its investigation and request for your records are proper. When the reason for the delay of notice no longer exists, you will be notified that your records were obtained.

Transfer of Information

Generally, a federal agency which obtains your financial records is prohibited from transferring them to another federal agency unless it certifies in writing that the transfer is proper and sends a notice to you that your records have been sent to another agency.

Penalties

If a federal agency or financial institution violated the Right to Financial Privacy Act, you may sue for damages or to seek compliance with the law. If you win, you may be repaid your attorney's fees and costs.

Additional Information

If you have any questions about your rights under this law or how to consent to the release of your financial records, you may contact [name] at [regional office phone number].

(Figure 11a)

Name
Address

Dear (customer name):

We are seeking records or information concerning transactions from your accounts held by the financial institution named in the attached subpoena in accordance with the Right to Financial Privacy Act⁽⁹⁾. We are seeking the information for an investigation pursuant to Title I of the Employee Retirement Income Security Act of 1974 (ERISA). Below, this letter notifies you of the purpose of the investigation and of steps that you must take if you want to seek to prevent that financial institution's disclosure to the U.S. Department of Labor of the requested financial records in response to the attached subpoena.

Records or information concerning your transactions held by the financial institution named in the attached subpena or summons are being sought by this (agency or department) in accordance with the Right to Financial Privacy Act of 1978 [12 U.S.C.A. § 3401 et seq.] for the following purpose:

[Here, describe the purpose of the investigation.]

If you want to prevent the requested disclosure of financial records, you must:

Fill out the accompanying motion paper and sworn statement or write one of your own, stating that you are the customer whose records are being requested by the Government and either giving the reasons you believe that the records are not relevant to the legitimate law enforcement inquiry stated in this notice or any other legal basis for objecting to the release of the records.
File the motion and statement by mailing or delivering them to the clerk of any one of the following United States district courts.
Serve the Government authority requesting the records by mailing or delivering a copy of your motion and statement to any of the following United States District Courts:
- the location of the financial institution;
- the residence of the customer;
- the District of Columbia;
- or the location of the employee benefit plan
Be prepared to come to court and present your position in further detail.
You do not need to have a lawyer, although you may wish to employ one to represent you and protect your rights.

If you do not follow the above procedures, upon the expiration of ten days from the date of service or fourteen days from the date of mailing of this notice, the records or information requested therein will be made available. These records may be transferred to other Government authorities for legitimate law enforcement inquiries, in which event you will be notified after the transfer.

If you do not follow the above procedures, upon the expiration of ten days from the date of service or fourteen days from the date of mailing of this notice, the records or information requested therein may be made available. These records may be transferred to other government authorities for legitimate law enforcement inquiries, in which event you will be notified after the transfer.

Very truly yours,

Director of Enforcement/Regional Director
U.S. Department of Labor
Employee Benefits Security Administration
Address
Telephone Number

Enclosures:

Subpoena
Motion Form
Sworn Statement Form

(Figure 11b)
Instructions for Completing and Filing the Motion and Sworn Statement

Type or print in ink the indicated information in the spaces provided on the enclosed motion and sworn statement forms (except where signatures are required).⁽¹⁰⁾
Provide the reasons that the financial records sought are not relevant to the legitimate law enforcement inquiry. You may also challenge the Department of Labor's access to the financial records if there has not been substantial compliance with the Right to Financial Privacy Act, or for any other reasons allowed under the law. You should state the facts that are the basis for your challenge as specifically as you can.
To file your challenge with the Court, either mail or deliver the original and one copy of your motion and sworn statement with payment of the Court's filing fee.⁽¹¹⁾
You must also deliver one copy of your motion and sworn statement to the government official whose name appears on the Customer Notice.⁽¹²⁾
Contact the government official whose name and telephone number appear on the Customer Notice if you have questions.

(Figure 11c)
Customer's Motion to Challenge Government's Access To Financial Records

In The United States District Court For The _________________________ District Of (Name of District)
(State in which Court is located)

_________________________
(Your Name)

Movant

U.S. Department of Labor

Respondent

) Miscellaneous No. _______________________
) (Will be filled in by Clerk)
)
)
) Motion For Order
) Pursuant To Customer
) Challenge Provisions
) Of The Right To Financial
) Privacy Act of 1978.
)

_________________________ (Your Name) hereby moves this Court, pursuant to section 1110 of the Right to Financial Privacy Act of 1978, 12 U.S.C. §3410, for an order preventing the government from obtaining access to my financial records. The agency seeking access is the U.S. Department of Labor, Employee Benefits Security Administration. My financial records are held by

_________________________
Name of Financial Institution

In support of this motion, the Court is respectfully referred to my sworn statement filed with this motion.

Respectfully submitted,

________________________________________
(Your Signature)

________________________________________
(Your Name)

________________________________________
(Your Address)

________________________________________
(Your Telephone Number)

(Figure 11c)
Customer's Motion to Challenge Government's Access To Financial Records

In The United States District Court For The _________________________ District Of (Name of District)
(State in which Court is located)

_________________________
(Your Name)

Movant

U.S. Department of Labor

Respondent

) Miscellaneous No. _______________________
) (Will be filled in by Clerk)
)
)
) Motion For Order
) Pursuant To Customer
) Challenge Provisions
) Of The Right To Financial
) Privacy Act of 1978.
)

_________________________
Name of Financial Institution

In support of this motion, the Court is respectfully referred to my sworn statement filed with this motion.

Respectfully submitted,

________________________________________
(Your Signature)

________________________________________
(Your Name)

________________________________________
(Your Address)

________________________________________
(Your Telephone Number)

(Figure 11e)
Customer's Sworn Statement For Filing A Challenge

In The United States District Court For The __________________ District of (Name of District)
(State in which Court is located)

_________________________
Name

Movant

U.S. Department of Labor

Respondent

) Miscellaneous No. ______________________
) (Will be filled in by Clerk)
)
)
) Sworn Statement of Movant
)
)
)
)
)

I, _________________________ (Your Name) _________________________, am presently/was previously a customer of _________________________ (Name of Financial Institution) _________________________, and I am the customer whose records are being requested by the Government.

The financial records sought by the U.S. Department of Labor, Employee Benefits Security Administration:

are not relevant to the legitimate law enforcement inquiry stated in the Customer Notice that was sent to me because

should not be disclosed because there has not been substantial compliance with the Right to Financial Privacy Act of 1978, as shown by the following facts

should not be disclosed on the following other legal basis

I declare under penalty of perjury that the foregoing is true and correct.

_________________________
Date

_________________________
(Your Signature)

(Figure 12)
Model Accommodation Letter
Accompanying Subpoena in a Criminal Case

Certified Mail - Return Receipt Requested

Name
Address

Re: Investigation Involving ___ (name of plan)___
EBSA Case No. XX-XXXXXX

Dear: _________________________

We are conducting a criminal investigation of the above referenced matter pursuant to Section 504(a) and 506(b) of the Employee Retirement Income Security Act of 1974 (ERISA) or other related Federal laws, including Title 18 of the United States Code.

The enclosed subpoena requires you to produce identified documents in connection with that investigation. Your personal appearance pursuant to this subpoena is not required provided you produce the requested documents.

We can discuss arrangements to minimize the time and interference with normal day-day to operations. Instead of producing all of the requested documents at the time and place specified in the subpoena, we can inspect the documents at their present location, pursuant to a written agreement with procedures for access, inspection and copying. We are willing to consider your suggestions to reduce the impact of compliance with our subpoena.

To discuss arrangements for subpoena production, please con¬tact (name of Investigator/Auditor) at (telephone number) on or before (date). In the absence of an agreement, we will expect full compliance with the subpoena by (date).

Sincerely,

Director of Enforcement/Regional Director
Enclosure

(Figure 13)
United States Department of Labor
Employee Benefits Security Administration
Model Letter Accompanying Criminal Subpoena Duces Tecum

Certified Mail - Return Receipt Requested

Name
Address

Re: Investigation Involving __(name of plan)____
EBSA Case No. XX-XXXXXX

Dear: _________________________

We are conducting a criminal investigation of the above referenced matter pursuant to Section 504(a) and 506(b) of the Employee Retirement Income Security Act of 1974 (ERISA) and other related Federal laws, including Title 18 of the United States Code.

Please provide the required documents with a cover letter identifying the documents you are producing. In the letter, you should also state whether you conducted a diligent search for the subpoenaed documents and whether the documents you are producing include all of the requested documents. If any documents called for are not furnished, please list those documents and your reason for not producing them.

The subpoena requests that you produce documents in electronic form (Electronically Stored Information (ESI)) if you maintain those documents in electronic form.⁽¹³⁾

Sincerely,

Director of Enforcement/Regional Director
Enclosure

(Figure 14)
Authentication Form Pursuant to FRE

Certification Under Federal Rules of Evidence
803(6), 902(11), and 902(13)

I hereby certify that I am a records custodian / employee at ___________________ (name of business⁽¹⁴⁾), hereafter "the business." I further certify that:

The attached records, consisting of, ____ are true and correct copies/original records of the business, and I am familiar with how the records were created, managed, stored, and retrieved;
It is the regular practice of the business to make and maintain such records;
The records were made at or near the time of the events reflected in the records;
The records were made by, or from information transmitted by, a person with knowledge of the events reflected in the records, or the records were generated by an electronic process or system that produces an accurate result.
I declare (or certify, verify, or state) under penalty of perjury that the foregoing is true and correct.⁽¹⁵⁾

Executed on

__________________
(Date)

______________________________
Signature

______________________________
Name (Typed or Printed)

______________________________
Title

Footnotes

(Figure 1)
Sample VC Notice Letter

Date

Recipient
1111 ABC St.
City, ST 00000

Re: Name of Plan
Case Number 00-000000 (00)

You may have violated provisions of the Employee Retirement Income Security Act by loaning money to a party in interest. You will remain in violation until you:

Restore the money loaned to the Plan, and

Send us documentation to confirm that you have done so.

Please contact the U.S. Department of Labor by DATEOFLETTER+10 to discuss how you plan to correct these violations, restore losses to the NAME OF PLAN, and ensure future compliance. You may contact us using the information above, or email INVESTIGATOR at last.first@dol.gov.

Dear ___________:

The Department of Labor has conducted its investigation of the XYZ Plan and of your activities as its trustee. Based on the information reviewed so far, we have concluded that, as trustee, you may have violated several provisions of the Employee Retirement Income Security Act (ERISA). The purpose of this letter is to advise you of our findings and to give you an opportunity to comment before the Department determines whether and how to proceed.

What We Found

As we understand the facts, Mr. Smith is a trustee and participant in the Plan. As a trustee and participant in the Plan, Mr. Smith is a fiduciary and party in interest to the Plan.⁽⁴⁾

On December 1, 2005, the Plan loaned $25,000 to Mr. Smith. This loan is unsecured and bears an interest rate of 5 percent. It is our view that this loan violates ERISA sections 406(a)(1)(B) and 406(b)(1), which prohibit fiduciaries from self-dealing.⁽⁵⁾

In addition, our investigation has disclosed that (outline additional facts and violations as above).

Additional information may lead us to revise our views, but for the reasons cited above, we have concluded that you are in violation of ERISA and will remain so as long as the loan in question remains outstanding.

Next Steps

We are providing this information to help you evaluate your obligations as a fiduciary within the meaning of ERISA. Please contact us by DATEOFLETTER+10 to discuss how you plan to correct these violations, restore losses to the Plan, and achieve future compliance.

Additional Notes

The Secretary of Labor must assess a civil penalty (equal to 20 percent of the amount recovered under a settlement agreement or court order) against a fiduciary that breaches a fiduciary responsibility or otherwise violates ERISA Title I part 4.⁽⁶⁾ If you correct these actions based on a settlement agreement with the Department, we will close the investigation without further action except for the civil penalty described above, and will not file suit with regard to these issues.

If you do not correct these actions, we may refer the matter to the Office of the Solicitor of Labor for possible legal action. Please note that even if the Secretary of Labor decided not to take legal action, other parties – including plan fiduciaries, participants, and beneficiaries – could still do so. The Secretary is authorized to furnish information to "any person actually affected by any matter which the subject "of an ERISA investigation.⁽⁷⁾ If you take corrective action that is not pursuant to a settlement agreement with the Department, it will not grant, expressly or by implication, a release of any claims that the Secretary still might assert in the future.

The Department is speaking only for itself and only with regard to the issues discussed above. We have no authority to restrain any third party or any other governmental agency from taking further action.

Sincerely,

Name

(Figure 2)

Department Of Labor

Employee Benefits Security Administration
[Prohibited Transaction Exemption 94-71; Application No. D-9484]

Grant of Class Exemption to Permit Certain Transactions Authorized Pursuant to Settlement Agreements between the U.S. Department of Labor and Plans

Agency: Employee Benefits Security Administration

Action: Grant of Class Exemption

Summary: This document contains a final exemption from certain prohibited transaction restrictions of the Employee Retirement Income Security Act of 1974 (ERISA) and the Internal Revenue Code of 1986 (the Code). The class exemption applies to certain prospective transactions involving employee benefit plans where such transactions are specifically authorized by the Department pursuant to a settlement agreement. The exemption affects plans, participants and beneficiaries of such plans, and certain individuals engaging in such transactions or activities.

For further information contact: [Insert Office Point of Contact], Office of Exemption Determinations, Employee Benefits Security Administration, U.S. Department of Labor 202.693.XXXX (not a toll-free number); or [Insert Office Point of Contact], Plan Benefits Security Division, Office of the Solicitor, U.S. Department of Labor 202.693.XXXX (not a toll-free number).⁽⁸⁾

Supplementary Information: On May 27, 1994, the Department of Labor (the Department) published a notice in the Federal Register (59 FR 27581) of the pendency of a proposed class exemption from the restrictions of section 406(a)(1)(A) through (D), 406(a)(2), 406(b)(1) and 406(b)(2) of ERISA and from the taxes imposed by section 4975(a) and (b) of the Code, by reason of section 4975(c)(1)(A) through (E) of the Code.

The Department proposed the class exemption on its own motion pursuant to section 408(a) of ERISA and section 4975(c)(2) of the Code, and in accordance with the procedures set forth in 29 CFR part 2570, subpart B (55 FR 32836, August 10, 1990).

The Notice gave interested persons an opportunity to submit written comments or requests for a hearing on the proposed exemption to the Department. No public comments and no requests for a public hearing with respect to the proposed class exemption were received by the Department. Upon consideration of the record as a whole, the Department had determined to grant the class exemption as proposed.

General Information

The attention of interested persons is directed to the following:

The fact that a transaction is the subject of an exemption under section 408(a) of ERISA and section 4975(c)(2) of the Code does not relieve a fiduciary or other party in interest or disqualified person with respect to a plan from certain other provisions of ERISA and the Code, including any prohibited transaction provisions to which the exemption does not expressly apply and the general fiduciary responsibility provisions of section 404 of ERISA. Section 404 requires, in part, that a fiduciary discharge his or her duties respecting the plan solely in the interest of the participants and beneficiaries of the plan and in a prudent fashion in accordance with section 404(a)(1)(B) of ERISA. This exemption does not affect the requirement of section 401(a) of the Code that a plan must operate for the exclusive benefit of the employees of the employer maintaining the plan and their beneficiaries.
The exemption will not extend to transactions prohibited under section 406(b)(3) of ERISA and section 4975(c)(1)(F) of the Code.
In accordance with section 408(a) of the Act and section 4975(c)(2) of the Code, and based upon the entire record, the Department finds that the exemption is administratively feasible, in the interest of plans and of their participants and beneficiaries and protective of the rights of the participants and beneficiaries of such plans.
The exemption is supplemental to, and not in derogation of other provisions of ERISA and the Code, including statutory or administrative exemptions and transitional rules. Furthermore, the fact that a transaction is subject to an administrative or statutory exemption is not dispositive of whether the transaction is in fact a prohibited transaction.
The exemption is applicable to a transaction only if the conditions specified in the class exemption are satisfied.

Exemption

Accordingly, the following exemption is granted under the authority of section 408(a) of the Act and section 4975(c)(2) of the Code, and in accordance with the procedures set forth in 29 CFR part 2570, subpart B (55 FR 32836, August 10, 1990).

Effective as of October 7, 1994, the restrictions of section 406(a)(1)(A) through (D), 406(a)(2), 406(b)(1) and 40b(b)(2) of ERISA and the taxes imposed by section 4975(a) and 4975(b) of the Code, by reason of section 4975(c)(1)(A) through (E) of the Code, shall not apply to a transaction or activity which is authorized, prior to the occurrence of such transaction or activity, by a settlement agreement resulting from an investigation of an employee benefit plan conducted by the Department under the authority of section 504(a) of ERISA provided that:

The nature of such transaction or activity is specifically described in writing, by the terms of such settlement agreement.
The Department of Labor is party to the settlement agreement.
A party who will be engaging in the transaction or activity has provided written notice to the affected participants and beneficiaries in a manner that is reasonably calculated to result in the receipt of such notice at least 30 days prior to entry into the settlement agreement.
A copy of the notice and the method of distribution is approved in advance by the area or district office of the Department which negotiated the settlement.
The notice includes an objective description of the transaction or activity, the approximate date on which the transaction will occur, the address of the area or district office of the Department which negotiated the settlement agreement, and a statement apprising the participants and beneficiaries of their right to forward their comments to such office.

Signed at Washington, DC, this 30th day of September 1994.

Alan D. Lebowitz
Deputy Assistant Secretary of Program Operations
Employee Benefits Security Administration
U.S. Department of Labor

(Figure 3)
Settlement Agreement

This Agreement, entered into by and between the United States Department of Labor, Employee Benefits Security Administration (EBSA) and the [Trustee ("the Trustee")] of the ____________________ ("the Plan") shall fully resolve and settle between these parties the following issues:

[Description of Transaction]

No other issues or violations cited in the [date] letter to the Trustee are subject to the terms of this agreement.

Having received the [date] letter, the Trustee has entered into negotiations with EBSA, and the parties have made the following representations:

Now, in consideration of such representations [the Trustees] and EBSA agree as follows:

____________________ will [describe activity].
The Trustees shall provide to EBSA evidence of the Correction deemed sufficient by EBSA to ensure that the terms of this Agreement have been fulfilled.
EBSA will take no further enforcement action with respect to the Plan's underlying violation which is the subject of this settlement agreement other than the imposition of any relevant civil penalties under ERISA section 502(l), 29 U.S.C. Section 1132(l). In the event that the representations made by the trustees in paragraphs 2, 4, 6, and 8 of this Agreement are not true and correct, then this Agreement is voidable at the election of the Department of Labor.
The Correction is provided exemptive relief under PTE 94-71.
Each of the signatories below hereby represents that he or she is authorized and entitled to sign on behalf of the parties hereto.

Dated this ____________________ day of ____________________, 20____________________.

For: ____________________

By:____________________

For: The United States Department of Labor, Employee Benefits Security Administration

By: ____________________
Regional Director

(Figure 4)
Sample PTE 94-71 Notice to Affected Parties

You are hereby notified that the United States Department of Labor plans to enter into a settlement with [insert name of parties]. The settlement contemplates a proposed [insert description of transaction requiring exemptive relief under PTE 94-71]. As a participant or beneficiary of the plan, you are hereby provided the following information with respect to the proposed transaction (the Proposed Transaction).

In order to resolve this matter, [insert case-specific information relating to corrected transaction];
As a person who may be affected by the Proposed Transaction, you have the right to submit comments on the Proposed Transaction to the U.S. Department of Labor. Comments concerning the Proposed Transaction, which may be sent anonymously, should be addressed to: United States Department of Labor, Employee Benefits Security Administration, [insert Regional Office Address].
If the settlement agreement is finalized, the Proposed Transaction will occur on or about [insert approximate date].

(Figure 5)
Settlement Agreement No. 1

This Agreement, entered into by and between the United States Department of Labor, Employee Benefits Security Administration (EBSA) and ____________________, shall fully and finally resolve and settle the issues between the parties that were raised by EBSA in its letter to ____________________ dated ____________________ and which are set forth as follows:

(Briefly describe issues.)

Whereas, in connection with this Agreement, ____________________ has agreed to pay $X to the ____________________ Plan (the plan);

Whereas, EBSA is required to assess a civil penalty of twenty percent (20%) on amounts recovered under a settlement agreement or court order ("applicable recovery amount"), pursuant to ERISA section 502(l)(2), 29 U.S.C. section 1132(l)(2);

Whereas, EBSA has determined that the applicable recovery amount within the meaning of ERISA section 502(l), 29 U.S.C. section 1132(l) is $Y;

Whereas, this Agreement is not binding on any governmental agency other than the United States Department of Labor.

Therefore, in consideration of these mutual undertakings and understandings, EBSA and ____________________ agree as follows:

____________________ shall, within ____________________ days of the signing of this Agreement, pay $X to the Plan.
Upon payment of $X to the Plan pursuant to this Agreement EBSA will assess a penalty of twenty percent (20%) of the applicable recovery amount, pursuant to ERISA section 502(l)(2), 29 U.S.C. section 1132(l)(2); said penalty amount to be paid will be $Y, which represents 20% of the portion of the applicable recovery amount.
Within ten (10) days of receipt of EBSA's assessment letter, ____________________ shall pay said penalty as directed in the letter from EBSA's authorized representative.
(Other relief, if any, agreed to between the parties.)
Each of the signatories below hereby represents that he or she is authorized and entitled to sign on behalf of each of the parties hereto.

Dated this ____________________ day of ____________________, 20____________________.

For:

By:

For: The United States Department of Labor, Employee Benefits Security Administration

By:
Regional Director

(Figure 6)
Settlement Agreement No. 2

This Agreement, entered into by and between the United States Department of Labor, Employee Benefits Security Administration (EBSA), and ____________________, with the exception of issues concerning the assessment of a civil penalty under ERISA section 502(l), 29 U.S.C. section 1132(l), shall fully and finally resolve and settle the issues between the parties that were raised by EBSA in its letter to ____________________, dated ____________________, and which are set forth as follows:

(Briefly describe issues.)

Whereas, in connection with this Agreement, ____________________ has agreed to pay $X to the ____________________ Plan (the Plan);

Whereas, EBSA maintains that it is required to assess a civil penalty of twenty percent (20%) on amounts recovered under a settlement agreement or court order ("applicable recovery amount"), pursuant to ERISA section 502(l)(2), 29 U.S.C. section 1132(l)(2);

Whereas, ____________________ reserves all rights to contest the assessment and calculation of the civil penalty under ERISA section 502(l), 29 U.S.C. section 1132(l), and to petition the Secretary of Labor for a waiver or reduction of the civil penalty;

Whereas, this Agreement is not binding on any governmental agency other than the United States Department of Labor.

Therefore, in consideration of these mutual undertakings and understandings, EBSA and ____________________ agree as follows:

____________________ shall, within ____________________ days of the signing of this Agreement, pay $X to the Plan.
Each of the signatories below hereby represents that he or she is authorized and entitled to sign on behalf of each of the parties hereto.

Dated this ____________________ day of , 20 ____________________.

For: ____________________

By:

For: The United States Department of Labor, Employee Benefit Security Administration

By:
Regional Director

(Figure 7)
Sample Pattern Closing Letter
No ERISA Violations Detected

Date

Recipient
1111 ABC St.
City, ST 00000

Re: Name of Plan
Case Number 00-000000 (00)

Dear (Plan Administrator/Fiduciary):

We have concluded our limited investigation of (name of plan) under the Employee Retirement Income Security Act (ERISA). We plan to take no further action at this time.

Please note that the Department's findings or absence of findings, including the absence of findings regarding any specific provision of the Plan, do not bind the Department in:

reviewing or investigating any other employee benefit plan, service provider, or
a subsequent or further review of the Plan regarding issues not raised by this investigation.

Our decision is binding on the Department only. It does not prevent another individual or governmental agency from taking action.

Thanks for your cooperation.

Sincerely,

Regional Director

Enclosure: SBREFA Notice⁽⁹⁾
cc: OE
File

(Figure 8)
Sample Closing Letter
No Action Warranted
This closing letter should not be used in a 502(l) or 502(i) situation

[heading]

Dear:

The Department of Labor (the Department) has responsibility for administration and enforcement of Title I of the Employee Retirement Income Security Act of 1974 (ERISA). Title I establishes standards governing the operation of employee benefit plans such as XYZ Plan (Plan).

This office has concluded its investigation of the Plan and of your activities as its trustee. Based on the facts gathered during this investigation, and subject to the possibility that additional information may lead us to revise our views, it appears that, as trustee, you may have breached your fiduciary obligations to the Plan and have violated several provisions of ERISA. The purpose of this letter is to advise you of our findings.

As we understand the facts, many of which you provided to this office during the course of our investigation, on December 1, 2005, the Plan loaned $500 to the XYZ Company, which is the plan sponsor and thus a party in interest to the Plan within the meaning of ERISA section 3(14). This loan was repaid on December 15, 2005. It is our view that this loan violates ERISA section 406(a)(1)(B), which provides:

406(a)(1)

A fiduciary with respect to a plan shall not cause the plan to engage in a transaction, if he knows or should know that such transaction constitutes a direct or indirect-

(B) lending of money or other extension of credit between the plan and a party in interest;

In addition our investigation has disclosed that (outline additional violations as above).

[With the exception of the reporting violations noted above,]⁽¹⁰⁾ We have concluded that further action is not warranted at this time. You are cautioned, however, to refrain from such conduct in the future.

Please be further advised that the resolution of this matter is limited to the specific issues reviewed in the current investigation of the Plan. The Department's findings or absence of findings, including the absence of findings regarding any specific provision of the Plan, shall not bind the Department in the review or investigation of any other employee benefit plan, any service provider, or a subsequent review of the Plan regarding issues not raised by this investigation. You are further cautioned that this notice addresses only the issues described above. You must also be aware that the responsibility for the acceptance or rejection of any Annual Report (Form 5500) or any part thereof is delegated to the EBSA Office of the Chief Accountant (OCA). [The final decision whether the reporting violations described above have been adequately corrected will be made by the OCA pursuant to the federal regulations set forth at 29 C.F.R. 2570.61 et seq. Accordingly, the reporting issues will be referred to the OCA for whatever action they deem appropriate.]

You must understand that the Department's decision is binding on the Department only and only concerns the matters discussed above. Any other individual or governmental agency remains free to take whatever action it may deem appropriate.

[In addition, there is an excise tax on disqualified people (generally, the same as parties in interest under Title I of ERISA) who engage in prohibited transactions with employee retirement benefit plans. In general, this excise tax, which the Internal Revenue Service administers and enforces, applies in two steps:

a first level tax equal to 15 percent of the amount involved in the transaction for each taxable year during which the transaction is outstanding, and
a second level tax, equal to 100 percent of the amount involved if the transaction is not corrected.

You must pay the excise tax when you file Form 5330 with the Internal Revenue Service.

Please also note that ERISA requires the Secretary of Labor to transmit to the Secretary of the Treasury information indicating that a prohibited transaction has occurred.⁽¹¹⁾ Accordingly, we will refer this matter to the Internal Revenue Service.]

We hope this letter will be helpful to you in the execution of your fiduciary duties.

Sincerely,

Regional Director

Enclosures:
Filing information on the Form 5330
SBREFA Notice⁽⁹⁾

(Figure 9)
Sample Closing Letter Corrective Action Taken

[heading]

Dear :

We have received your letter dated ____________________ concerning the ____________________ Plan which was in response to our letter dated ____________________.

We have concluded our investigation of the XYZ Plan and of your activities as its trustee. Based on the facts reviewed to date, we have concluded that, as a trustee, you breached your fiduciary obligations to the Plan and violated several provisions of the Employee Retirement Income Security Act (ERISA).

Our previous letter detailed the specific actions you took which we believe violated ERISA. In your letter dated ____________________, you confirm those facts. It is our understanding that you have taken corrective actions with respect to the specific violations detailed in my DATE letter. Specifically, you:

(detail actions taken)
etc.

Because you have taken the corrective action described above, the Department of Labor is closing its investigation. We caution you to refrain from the conduct identified, above, as violating ERISA in the future.

While we are closing the case, the Department has not released any claims that the Secretary might assert in the future, and the decision to close this case does not prevent the Department or any other individual or governmental agency from taking any further action it may deem appropriate with respect to these or other matters.

The Department's findings or absence of findings, including the absence of findings regarding any specific provision of the Plan, do not bind the Department in:

reviewing or investigating any other employee benefit plan, service provider, or
a subsequent or further review of the Plan or the conduct that was the subject of this investigation.

Please note that EBSA’s Office of the Chief Accountant is responsible for accepting or rejecting any Annual Report (Form 5500) in whole or in part. [The Office of the Chief Accountant will make the final decision concerning the adequacy of any Annual Report or any part thereof pursuant to the federal regulations set forth at 29 C.F.R. 2570.61 et seq.]

a first level tax equal to 15 percent of the amount involved in the transaction for each taxable year during which the transaction is outstanding, and
a second level tax, equal to 100 percent of the amount involved if the transaction is not corrected.

You must pay the excise tax when you file Form 5330 with the Internal Revenue Service.

Sincerely,

Name
Regional Director

Enclosures:
Filing information on the Form 5330
SBREFA Notice

OPPEM (When 502(l) issues are involved)

(Figure 10)
Sample Closing Letter
No VC Letter/Referral to IRS
This closing letter should not be used in a 502(l) or 502(i) situation

[heading]

Dear ___________:

What We Found

As we understand the facts, Mr. Smith is a trustee and participant in the Plan. As a trustee and participant in the Plan, Mr. Smith is a fiduciary and party in interest to the Plan.

In addition, our investigation has disclosed that (outline additional facts and violations as above).

We Are Closing the Case

[With the exception of the reporting violations noted below,]⁽¹⁰⁾ We have concluded that further action by the Department is not warranted at this time; however, you are cautioned to refrain from such conduct in the future.

The Department's findings or absence of findings, including the absence of findings regarding any specific provision of the Plan, do not bind the Department in:

reviewing or investigating any other employee benefit plan, service provider, or
a subsequent or further review of the Plan or the conduct that was the subject of this investigation.

In addition, there is an excise tax on disqualified people (generally, the same as parties in interest under Title I of ERISA) who engage in prohibited transactions with employee retirement benefit plans. In general, this excise tax, which the Internal Revenue Service administers and enforces, applies in two steps:

a first level tax equal to 15 percent of the amount involved in the transaction for each taxable year during which the transaction is outstanding, and
a second level tax, equal to 100 percent of the amount involved if the transaction is not corrected.

You must pay the excise tax when you file Form 5330 with the Internal Revenue Service.

Sincerely,

Regional Director

Enclosures:
Filing information on the Form 5330
SBREFA Notice⁽⁹⁾

(Figure 11)
Sample Closing Letter

Date

Recipient
1111 ABC St.
City, ST 00000

Re: Name of Plan
Case Number 00-000000 (00)

You may have violated provisions of the Employee Retirement Income Security Act by loaning money to a party in interest. You will remain in violation until you:

Restore the money loaned to the Plan, and

Send us documentation to confirm that you have done so.

Dear ___________:

What We Found

As we understand the facts, Mr. Smith is a trustee and participant in the Plan. As a trustee and participant in the Plan, Mr. Smith is a fiduciary and party in interest to the Plan.⁽⁴⁾

In addition, our investigation has disclosed that (outline additional facts and violations as above).

In your letter dated ____________________, you denied that the facts concerning the December 1, 2005 loan were true (you confirmed that the facts concerning the December 1, 2005 loan were true, but denied that those facts constitute a violation of ERISA) as stated in my previous letter.

I have considered the information provided by you (and have conducted additional investigation with regard to the new facts presented) but remain of the view that the Department's original position is correct. Therefore, we continue to believe that you have violated, and remain in violation of; the above cited fiduciary provisions of ERISA.

We Are Closing the Case

Despite your refusal to undertake the corrective action we deem necessary, we have decided that legal action by the Department will not be commenced at this time. You are cautioned, however, that this decision only addresses issues other than reporting violations.

The Department's findings or absence of findings, including the absence of findings regarding any specific provision of the Plan, do not bind the Department in:

reviewing or investigating any other employee benefit plan, service provider, or
a subsequent or further review of the Plan or the conduct that was the subject of this investigation.

a first level tax equal to 15 percent of the amount involved in the transaction for each taxable year during which the transaction is outstanding, and
a second level tax, equal to 100 percent of the amount involved if the transaction is not corrected.

You must pay the excise tax when you file Form 5330 with the Internal Revenue Service.

Sincerely,

Name
Regional Director

Enclosures:
Filing information on the Form 5330
SBREFA Notice⁽⁹⁾

Footnotes

502(i) Civil Penalty
1. Statutory Authority. ERISA section 502(i)⁽¹⁾ authorizes the Secretary to assess a civil penalty against a party in interest who engages in a prohibited transaction with respect to either an employee welfare benefit plan or a non-qualified pension plan.⁽²⁾ This penalty applies to welfare and non-qualified plans, and complements the excise tax imposed on tax-qualified pension plans by section 4975(a) of the Internal Revenue Code.
  
  The Department's regulation identifies the procedures⁽³⁾ for assessing a two-tiered 502(i) civil penalty. It also communicates the circumstances when the party in interest may contest EBSA's findings and assessment.
  
  The first tier of the penalty may not exceed 5% of the "amount involved." The second tier of the penalty, which is not more than 100 % of the amount involved, applies only if the prohibited transaction remains uncorrected within 90 days after a final agency order⁽⁴⁾.
  
  Because the assessment of the civil penalty under section 502(i) is discretionary, the RO should consider the assessment of the 502(i) civil penalty as one of several enforcement options.
2. Notice. EBSA must notify a party in interest of its intention to assess the 502(i) penalty. Because OE issues all 502(i) assessments, the RD may wish to discuss situations involving potential 502(i) assessments with OE before issuing a VC notice letter. VC notice letters should include language preserving the Department's ability to assess the penalty.
3. Request for a 502(i) Assessment. The RO should send all requests to assess a 502(i) civil penalty to OE for processing. OE will review the request and, if appropriate, prepare the notice of assessment of the 502(i) civil penalty. See (Figure 1) for an example of a notice of assessment.
  
  The RO should include documentation sufficient to substantiate the violations alleged in its transmittal to OE. Specifically, the RO should forward a copy of the VC notice letter, if issued, and other correspondence, including any responses to the VC notice letter, the ROI, and exhibits to support a finding of the prohibited transactions along with an accurate calculation of the civil penalty.
4. First Level 502(i) Penalty. The first level penalty under section 502(i) is 5% of the "amount involved."
  
  Amount involved means the greater of the amount of money and the fair market value of the other property given or the amount of money and the fair market value of property received as of the date the prohibited transaction occurred.
  1. Amount Involved. When determining the amount involved, distinguish between situations that involve the prohibited transfer of ownership (generally, a sale or transfer of property) and the prohibited use of property (generally, the lease or loan of property). If there is a transfer of ownership rights, base the penalty on whichever is greater: the fair market value of the property or the actual amount of money that changes hands. For situations involving the use of property or money, such as a lease or a loan, the amount involved is whichever is greater: the amount paid for such use or the fair market value of such use for the period for which the money or property is used.
    
    For example, in the situation of a prohibited loan, the amount involved will be the interest actually paid or the fair market interest for such loan, whichever is greater. In the instance of a lease transaction, the amount involved will be the greater of the rent actually paid or the fair market rental value. In those situations involving compensation to a party in interest for services provided, the amount involved will be limited to any excess compensation paid.
  2. Discrete and Continuing Transactions. When calculating the civil penalty, distinguish between discrete and continuing prohibited transactions.
    1. Discrete Transactions. In the case of discrete transactions, such as sales of property, assess the first level of the civil penalty simply as 5% of the amount involved for each taxable year or portion thereof until the correction of the prohibited transaction or assessment of the penalty.⁽⁵⁾ Calculate the penalty on discrete transactions on an annual basis and do not prorate for a portion of the year. Therefore, a transaction entered into in the middle of one year and/or the correction occurs in the middle of a subsequent year, the amount of the penalty is the full amount for each of the two years.
    2. Continuing Transactions. In the case of a continuing prohibited transaction, such as a lease or a loan, a new transaction is deemed to occur on the first day of each year or portion thereof in which the transaction continues. Such characterization of continuing transactions gives rise to the assessment of an additional sanction for each year the transaction remains uncorrected.
      
      In continuing violations, prorate the amount involved in the transaction for the actual period the use takes place. In addition, where there is an uncorrected completed lease or loan, the amount involved is cumulative for each taxable year until correction or assessment of the penalty. Calculate the penalty on a continuing transaction on an annual basis, but prorate for a portion of any year involved.
5. Second Level 502(i) Penalty. The Department may assess the second tier of the 502(i) civil penalty (100% of the amount involved), in addition to the first level penalty, if the prohibited transaction is not corrected within 90 days after a "final agency order" is issued.⁽⁶⁾
  
  Final Order means the final decision or action of the Department concerning the assessment of a civil sanction under ERISA section 502(i) against a particular party. Such final order may result from a decision of an administrative law judge or the Secretary, or the failure of a party to invoke the procedures for hearings or appeals under the regulation.
  
  In general, the correction period begins on the date the prohibited transaction occurs and ends 90 days after a final agency order.
6. 502(i) Appeals. A party in interest who elects to contest EBSA's findings and assessment may request a hearing before an administrative law judge (ALJ). In general, the party in interest may file an answer and request for a hearing with the ALJ within 30 days of service of process. Failure to do will be deemed to be a waiver of the right to appeal as well as an admission of the facts alleged.
  
  Amount involved in the transaction, for purposes of the second level of the 502(i) penalty, is the highest fair market value during the correction period.
  
  Unless otherwise waived, the party in interest may file an appeal to the Secretary within 20 days of the issuance of the ALJ's final decision. Upon such appeal, the Secretary may affirm, modify, or set aside, in whole or in part, the decision on appeal. The Secretary's review is not a de novo proceeding, but rather a review of the record established before the ALJ. EBSA delegates the Director of the Office of Policy and Research to conduct this review.

502(l) Civil Penalty.

Statutory Authority. ERISA section 502(l)⁽⁷⁾ requires the Secretary to assess a civil penalty against:
1. A fiduciary who breaches a fiduciary responsibility under, or violates, part 4 of Title I of ERISA; or
2. Any other person who knowingly participates in such breach or violation.
The Department's regulation⁽⁸⁾ specifies:
1. The procedures under which a penalty will be assessed;
2. When an assessed penalty must be paid; and
3. The circumstances under which the Secretary may waive or reduce a penalty.
Note: The Secretary may delegate authority to the Assistant Secretary for EBSA, RDs for EBSA, or Deputy RD for EBSA.
Notice of Assessment.

Notice shall be any document, which contains a specified assessment in monetary terms of a civil penalty under 502(l).

The Notice will include:
1. A brief factual description of the violation for which the assessment is being made;
2. The identity of the person being assessed;
3. The amount of the assessment; and
4. The basis for assessing that particular person with that particular penalty amount.
After receiving the applicable recovery amount pursuant to either a settlement agreement (See Voluntary Compliance section paragraph 11) or a court order, the RO shall serve a notice of assessment (Notice) on the person liable for paying the penalty.

If there is an applicable civil penalty pursuant to a voluntary compliance settlement agreement, RDs will assess the penalty as described in the Voluntary Compliance section (see Figures 2 and 3).

If correction is the result of a court order in a judicial proceeding, the order may include language assessing the 502(l) penalty. If not, or if the payment is not to be made immediately (i.e., either a deferred payment or a schedule of payments), the penalty will be assessed by the RD after the legal action (see Figures 3 and 4).
Service of the 502(l) Assessment Letter. Serve 502(l) assessment letters by:
1. Delivering a copy to the person⁽⁹⁾ being assessed;
2. Leaving a copy at the principal office, place of business, or residence of such person; or
3. Mailing a copy to the last known address of such person.
Upon mailing the notice by certified mail, service is complete. Upon receipt by the addressee by regular mail, service is complete.⁽¹⁰⁾
Assessment of the Penalty. The penalty under section 502(l) is equal to 20% of the "applicable recovery amount."⁽¹¹⁾
Applicable recovery amount means any amount recovered from a fiduciary or other person with respect to a breach or violation:
1. pursuant to any settlement agreement with the Secretary, or
2. ordered by a court to be paid by such fiduciary or other person to a plan or its participants and beneficiaries in a judicial proceeding instituted by the Secretary.
The 502(l) penalty is calculated as a percentage of the amount paid to the plan or to a participant or beneficiary that represents losses incurred by the plan, disgorged profits, and amounts necessary to achieve correction of the ERISA violation.

EBSA may assess the penalty only against fiduciaries and knowing participants in a breach or violation of part 4 of Title I of ERISA. It assesses the civil penalty only against the person who is required by the terms of the judgment or the settlement agreement to pay the applicable recovery amount. For example, if only one of a group of fiduciaries agrees to restore losses to a plan pursuant to a settlement agreement, EBSA only assesses the civil penalty against that fiduciary.

Additionally, in certain circumstances, the penalty may be assessed against fiduciaries or knowing participants when the restitution to the plan is made on their behalf by a third party. Specifically, the EBSA may assess the penalty when such third party does not have an independent obligation under ERISA to correct the violation(s).
Payment of the 502(l) Penalty. The party assessed a 502(l) civil penalty has 60 days to pay it, unless the party submits a petition for waiver or reduction during the 60-day payment period.

Within the 60-day payment period, the party may submit a written request for a conference with the Secretary to discuss the calculation of the assessed penalty. This request does not toll the payment period.

At the end of the 60-day payment period, if the party does not submit a petition for waiver or reduction of the penalty and there is no penalty payment, the RO should send a copy of the assessment letter and/or court order to OPPEM with a formal memorandum (copy to OE) requesting implementation of debt collection procedures.⁽¹²⁾

Petitions for Waiver or Reduction. At any time during the 60-day payment period, the party may petition the Secretary to waive or reduce the assessed penalty on the basis that:

The petitioner will not be able to restore all losses to the plan or any participant or beneficiary of such plan without severe financial hardship unless such waiver or reduction is granted, and/or
The petitioner acted in good faith in engaging in the breach or violation.

A petition submitted either before or during the 60-day payment period tolls the payment period pending Department consideration of the petition. The petitioner is entitled to a conference with the Secretary regarding each petition for waiver or the reduction of the civil penalty.

The petition for waiver or reduction of the penalty must be submitted to the RD. On petition based in whole on financial hardship, RDs will make a written determination of whether to reduce or waive the penalty on this basis within 60 days of receipt.

If the petition is based in part on financial hardship and in part on good faith, the RD will make a written determination of whether to reduce or waive the penalty only on the basis of financial hardship within 60 days of receipt.

If the petitioner remains liable for any portion of the penalty after the written determination, the RO will immediately forward the petition to OED, copying OE, for a determination of whether to reduce or waive the remaining portion of the penalty based on good faith.

RDs will immediately forward petitions based in whole on good faith to OED, copying OE, for a determination of whether to reduce or waive the penalty based on good faith.

Handling Petitions
Basis for Petition	Regional Director	OED and OE
Financial hardship only	Will make a written determination whether to reduce/waive penalty within 60 days of receipt	n/a
Good faith only	Will forward petition to OED, copying OE	Will determine whether to reduce/waive penalty
Financial hardship and good faith	Will make a written determination whether to reduce/waive financial hardship penalty within 60 days of receipt. Will forward petition to OED, copying OE, if petitioner remains liable for any portion after financial hardship determination.	Will determine whether to reduce/waive good faith penalty

Offsets against other penalties. The 502(l) civil penalty assessed on a person with respect to any transaction shall be reduced by the amount of any penalty or tax imposed on such person with respect to such transaction under ERISA section 502(i) or section 4975 of the Internal Revenue Code.⁽¹³⁾ Only the identical parties on whom the Department/IRS imposed a penalty/excise tax can offset the excise tax against the 502(l) penalty.⁽¹⁴⁾ The person assessed the penalty must provide proof the offsetting penalty was paid.
Compromise of 502(l) Penalty. RDs are delegated authority and responsibility with respect to compromise of 502(l) penalties. RDs may compromise a penalty only when⁽¹⁵⁾:
1. The case was referred to SOL for litigation,
2. The compromise is based on SOL’s written recommendation, and,
3. The penalty is not a Final Agency Order.
If the RD disagrees with SOL's recommendation, he/she must obtain approval from the National Office, through OE.
Write-off of 502(l) Debt. EBSA may consider a debt write-off after a 502(l) penalty assessment is a Final Agency Order, making it a collectable debt to the government. Only the Deputy Assistant Secretary for National Office Operations may write-off a 502(l) penalty debt. Any request for debt write-off will be referred to the RD for a recommendation on whether to reduce the penalty in whole or part. RDs should ask SOL for a written analysis and recommendation and forward all analyses and recommendations for handling the write-off to OE. After consultation with the RD and OPPEM, OE will prepare a proposed recommendation regarding the penalty write-off to the Deputy Assistant Secretary for National Office Operations.

502(c)(2) Civil Penalty.
1. Statutory Authority. ERISA section 502(c)(2)⁽¹⁶⁾ authorizes the Secretary to assess a civil penalty against any plan administrator who fails or refuses to file an annual report as required under ERISA section 101(b)(1).⁽¹⁷⁾ ERISA provides that an annual report rejected for failure to provide material information shall be treated as not filed with the Secretary.⁽¹⁸⁾
  
  The Department's regulation⁽¹⁹⁾ specifies the procedures for:
  1. Assessing the penalty,
  2. Paying the penalty, and
  3. Requesting an administrative hearing.
  The Secretary can delegate authority to any assistant secretary, including the Assistant Secretary for Employee Benefits Security,⁽²⁰⁾ administrator, commissioner, appellate body, board, or other official.
2. Implementing Procedure. The Office of the Chief Accountant (OCA) will institute penalties assessed under section 502(c)(2).
3. Voluntary Compliance Upon Discovery of a Reporting Violation. If the RD decides to resolve an open investigation by means of a VC notice letter rather than a referral for litigation, the deficient report violation should be included in the VC notice letter.
  
  If the plan fails to correct the deficient report violation as requested in the VC notice letter, and no other issues require further enforcement action, the RO refers the deficient reporting issue to OCA. The RD should issue a closing letter notifying the Plan Administrator of the action being taken (See Voluntary Compliance section, Figure 8, Figure 10, and Figure 11).
  
  OCA will make the final determination whether to institute further procedures to assess the civil penalty authorized in ERISA section 502(c)(2).
4. Referrals for Litigation. When the RD decides to refer a case to SOL with a recommendation for civil litigation, the deficient report violation is included in the Action ROI. Forward a copy of the transmittal memorandum, or a separate memorandum if necessary, so that the assessment of the civil penalty can be coordinated with OCA and SOL. The transmittal memo, copied to OE as described in the Fiduciary Investigations Manual section, should discuss the referral to OCA.
5. Concurrent Actions. When the RO wishes to open a case on a plan that is already under investigation by OCA, it should coordinate the investigation with OCA. Similarly, OCA will coordinate with the appropriate RO if it wishes to open a case on a plan under investigation by the RO.
502(c)(7) Civil Penalty
1. Statutory Authority. ERISA section 502(c)(7)⁽²¹⁾ authorizes the Secretary to assess a civil penalty against a plan administrator of an individual account plan who fails or refuses to provide notice to affected participants and beneficiaries in accordance with ERISA section 101(i).⁽²²⁾
  
  The failure or refusal to provide notice is a failure or refusal, in whole or part, to provide notice of the blackout period to an affected plan participant or beneficiary at the time and in the manner prescribed by section 101(i) of ERISA.
  
  The RO should treat a failure or refusal to provide a notice of blackout period with respect to any single participant or beneficiary as a separate violation.⁽²³⁾
  
  The Department's regulation⁽²⁴⁾ specifies the procedures for:
  1. Assessing a penalty;
  2. Paying a penalty; and
  3. Requesting an administrative hearing.
  The Secretary may delegate authority to any assistant secretary, including the Assistant Secretary for Employee Benefits Security Administration, administrator, commissioner, appellate body, board, or other official.⁽²⁵⁾
2. Implementing Procedure. OCA will institute penalties assessed under section 502(c)(7).
3. Voluntary Compliance When there is a Blackout Notice Violation. OCA will make the determination as to whether there is a violation of ERISA section 101(i). A blackout notice violation may not be included in the VC notice letter. See Figure 5 for language to use in the closing letter.
  
  OCA will make the final determination whether to institute further procedures to assess the civil penalty authorized in ERISA section 502(c)(7).
4. Referral for Litigation. When a case is referred to SOL for civil litigation, the potential blackout notice violation should be included in the Action ROI under "Other Findings." However, the transmittal memorandum should mention OCA is responsible for determining whether there is a violation of ERISA section 101(i) and the assessment of the civil penalty should be coordinated with OCA and SOL.
5. Concurrent Actions. When the RO wants to open a case on a plan under investigation by OCA, it should coordinate the investigation with OCA. Similarly, OCA will coordinate with the appropriate RO if it wishes to open a case on a plan under investigation by the RO.

(Figure 1)
ERISA Section 502(i) Assessment Letter

Board of Trustees
Local Union
1234 Main Street
Anytown, USA

RE: Notice of Assessment of ERISA Section 502(i) Civil Penalty in the Matter of the Local Union
EBSA Case No. XX-XXXXX

Dear Trustees:

We have concluded our investigation of the Fund pursuant to Title I of the Employee Retirement Income Security Act of 1974 (ERISA).⁽²⁶⁾ Our investigation found that the Union engaged in a transaction with the [Fund], prohibited by ERISA. As a result of this prohibited conduct, we plan to assess a civil penalty against the Union in the amount of $17,500, pursuant to section 502(i) of ERISA and the regulations thereunder.

On August 24, 2016, the Trustees voted at a special meeting to "donate" $50,000 to the Union out of the Fund’s tuition account. This contribution was contingent upon the Union’s increasing its membership dues. On the same date, Check No. 9566 for $50,000, was drawn on the Fund's account and paid to the Union.

The Union is a party in interest with respect to the Fund under section 3(14)(D) of ERISA, which defines a party in interest to include an employee organization any of whose members are covered by the plan. A fiduciary with respect to an employee benefit plan is prohibited from causing the plan to engage in a transaction if he knows or should know that such transaction constitutes a direct or indirect transfer to or use by or for the benefit of, a party in interest, of any assets of the plan (section 406(a)(1)(D)). Accordingly, the transfer of $50,000 to the Union constitutes a violation of section 406(a)(1)(D).

Section 502(i) of ERISA provides, in relevant part, that:

In the case of a transaction prohibited by section 406 by a party in interest with respect to a plan to which this part applies, the Secretary may assess a civil penalty against such party in interest. The amount of such penalty may not exceed 5 percent of the amount involved . . .; except that, if the transaction is not corrected . . . within 90 days after notice from the Secretary . . . such penalty may be in an amount not more than 100 percent of the amount involved.

Therefore, EBSA is assessing a civil penalty of $17,500 against the Union. The penalty is assessed for the period the prohibited transaction is outstanding until corrective action is taken.⁽²⁷⁾ The penalty is computed as shown on the Penalty Computation Sheet enclosed with this letter.

You may contest EBSA’s findings and the assessment of the civil penalty by filing an Answer⁽²⁸⁾ with the:

Chief Docket Clerk
Office of Administrative Law Judges
800 K Street, N.W.
Washington, D.C. 20001-8002.

If you file an Answer with the Office of Administrative Law Judges, that filing will initiate an adjudicatory proceeding in accordance with the regulations at 29 CFR Part 2570. Please note that 29 CFR section 2570.5 provides that if you fail to file an Answer with the Office of Administrative Law Judges within thirty (30) days of your receipt of this letter, such failure will constitute a waiver of your rights to contest this matter before an Administrative Law Judge, or to receive any other agency consideration. Failure to file an Answer will also constitute an admission of the facts alleged.

You should be aware that if you fail to correct the transaction within the correction period as described in 29 CFR 2560.502i-1(c) and (d) (generally 90 days after a final agency or judicial order), a second tier penalty of 100 percent of the amount involved will be assessed.

If you determine not to contest this matter, you should remit a check or money order in the amount of $17,500 payable to the United States Department of Labor at https://www.pay.gov/public/form/start/1063197296¹⁽²⁹⁾

If you would like to discuss your options for installment payments towards the debt arising from the penalty assessment, please send an email to ebsa-civilpenalties@dol.gov or contact Soroosh Nikouei at (202) 693-8486.

You will need the EBSA Case Number (listed at the top of this letter) and the Plan Name when you remit your payment. You should also notify me that you have paid the civil penalty.

If you would like to discuss correction of the violations and any other related matters, please contact Mr. X in the Office of Enforcement at (202) 693-XXXX.

Sincerely,

Director of Enforcement

Enclosure

cc:

Chief Docket Clerk
Office of Administrative Law Judges
800 K Street, NW
Washington, DC 20001-8002

Office of Administrative Law Judges
800 K Street, NW
Washington, DC 20001-8002

U.S. Department of Labor
Employee Benefits Security Administration,
Complainant

Local Union

)
)
) Docket No.
)
)
)
)

Respondent Respondent’s Answer

This matter is brought before the Office of Administrative Law Judges pursuant to action 502(i) of the Employee Retirement Income Security Act of 1974, 29 U.S.C. 1132(i), and the regulations issued thereunder.
By letter dated ____________________, the Complainant, the U.S. Department of Labor, the Employee Benefits Security Administration served the Respondent, Local Union, a notice of assessment of the civil penalty.
The total amount of the civil penalty assessed by the Complainant is $17,500.
Respondent hereby contests the findings of the Complainant and the assessment of the civil penalty as follows:

I hereby certify that service of the Respondent's Answer was made to the persons listed below by sending a copy by regular mail to the following addresses:
1. Director of Enforcement
  Employee Benefits Security Administration
  U.S. Department of Labor
  200 Constitution Avenue, NW, Room 600
  Washington, DC 20210
2. Plan Benefits Security Division
  Office of the Solicitor
  ERISA Section 502(i) Proceeding
  P.O. Box 1914
  Washington, DC 20013

Penalty Computation Sheet

The amount involved for the year ending December 31, 1999: $50,000 x .05= 2500
The amount involved for the year ending December 31, 2000: $50,000 x .05= 2500
The amount involved for the year ending December 31, 2001: $50,000 x .05= 2500
The amount involved for the year ending December 31, 2002: $50,000 x .05= 2500
The amount involved for the year ending December 31, 2003: $50,000 x .05= 2500
The amount involved for the year ending December 31, 2004: $50,000 x .05= 2500
The amount involved for the year ending December 31, 2005: $50,000 x .05= 2500

Total Civil Penalty Due $17,500

Footnotes

For help or more information on using pay.gov, please visit https://www.pay.gov/WebHelp/HTML/about.html.

(Figure 2)
Sample 502(1) Civil Penalty Assessment Letter
Settlement Agreement

Certified Mail, Return Receipt Requested

Within 60 days of this notice, please pay the ERISA Section 502(l) penalty or file a petition to waive or reduce the penalty.

Re: Notice of Assessment of ERISA Section 502(l) Civil Penalty in the Matter of (Name of Plan)
EBSA Case No. ________________________

Dear Mr./Ms.:

We have concluded our investigation of the Plan and of your activities as ______________ pursuant to Title I of the Employee Retirement Income Security Act of 1974 (ERISA).⁽³⁰⁾

We have concluded that you violated your fiduciary obligations to the Plan and violated several provisions of ERISA.⁽³¹⁾ My previous letter offered you an opportunity to obtain a release from certain further action, other than the imposition of the civil penalty required by ERISA section 502(l), by correcting the ERISA violation(s) and restoring losses to the plan. Based on your letter-dated ____________________, [if applicable] we understand that you have taken such action in response to this offer. Specifically, you [detail actions taken].

Since you have taken the agreed-upon corrective action with respect to the specific violations, the Department will take no further action with respect to these matters, except to impose the civil penalty as required by ERISA section 502(l).⁽³²⁾

This letter serves as Notice that we are assessing an ERISA section 502(l) civil penalty against you of $_______.⁽³³⁾ This amount is due within 60 days of the date of this Notice.

At any time prior to the due date, you may request a conference to discuss the penalty calculation. The 60-day payment period will not, however be tolled upon such request.

In addition, at any time prior to the expiration of the 60-day period, you may petition the Secretary to waive or reduce the assessed penalty, as explained in the attachment "Procedures under ERISA Section 502(l)". If a petition for waiver or reduction is submitted during the 60-day payment period, the payment period for the penalty will be tolled pending Departmental consideration of the petition.

Please mail the petition to the following address:

Regional Director
Regional Office Address

If you decide not to contest this matter, the $___ payment should be made online at https://www.pay.gov/public/form/start/1063197296.²

You will need the EBSA Case Number (listed at the top of this letter) and the Plan Name when you remit your payment. You should also notify me that you have paid the civil penalty.

Finally, I am required to advise the Internal Revenue Service that a prohibited transaction has occurred. As described in the enclosure, the ERISA Section 502(l) penalty amount will be reduced by the tax amount imposed under section 4975 of the Internal Revenue Code.

Sincerely,
Regional Director

Enclosures:

Letter dated from Regional Director to ____________________ (VC letter)
Procedures under ERISA Section 502(l)

bcc: OPPEM

Footnotes

For help or more information on using pay.gov, please visit https://www.pay.gov/WebHelp/HTML/about.html.

(Figure 3)
Procedures under ERISA Section 502(l)

(Figure 4)
Sample 502(1) Civil Penalty Assessment Letter
Consent Judgment

Certified Mail, Return Receipt Requested

Mr. X, Trustee
Profit Sharing Plan
Main Street
Anytown, USA

Within 60 days of this Notice, please pay the ERISA Section 502(l) penalty or file a petition to waive or reduce the penalty.

RE: Notice of Assessment of ERISA Section 502(l) Civil Penalty in the Matter of (the Plan)
EBSA Case No. XX-XXXXX

Dear Mr. X:

We have concluded our investigation of the Plan and of your activities as Trustee. Our investigation found that you violated your fiduciary obligations to the Plan and violated several provisions of ERISA.⁽³⁵⁾ The actions taken by you that violated ERISA were detailed in the Complaint filed on [date], [Secretary v. ____________________, et al., Docket # _____________].

On [date], a Consent Order and Judgment (Order) was filed in the United States District Court, which required you to pay [$X] to the Plan.⁽³⁶⁾ The terms of the Order require that you correct the ERISA violations and restore losses to the plan. Based upon the report of Mr. Y, the court approved independent party, we understand that you have complied with the above requirements. Among other things, you paid $X. . . (list corrective actions taken).

This letter serves as Notice that we are assessing an ERISA section 502(l) civil penalty against you of $_______.^{(37, 38)} This amount is due within 60 days of the date of this Notice.

At any time prior to the due date, you may request a conference to discuss the penalty calculation. The 60 day payment period will not be tolled for such request.

In addition, at any time prior to the due date, you may petition to waive or reduce the penalty.⁽³⁹⁾ If a petition is submitted during the 60 day payment period, the payment period for the penalty will be tolled pending consideration of the petition. The petition should be mailed to the following address:

Regional Director
Regional Office Address

If you decide not to contest this matter, the payment should be made online at https://www.pay.gov/public/form/start/1063197296.³

You will need the EBSA Case Number (listed at the top of this letter) and the Plan Name when you remit your payment. You should also notify me that you have paid the civil penalty.

Finally, we are required to advise the Internal Revenue Service that a prohibited transaction has occurred. As described in the enclosure, the ERISA Section 502(l) penalty amount will be reduced by the tax amount imposed under section 4975 of the Internal Revenue Code.

Sincerely,

Regional Director

Enclosures:

Consent Judgment
Procedures Under ERISA Section 502(l)

bcc: OPPEM

Footnotes

For help or more information on using pay.gov, please visit https://www.pay.gov/WebHelp/HTML/about.html.

(Figure 5)
Blackout Notice

We recently conducted an investigation pursuant to the Employee Retirement Income Security Act of 1974 involving the [Plan], and of [Plan Sponsor and Plan Administrator], as the Plan Sponsor and Plan Administrator, and the [Named Fiduciary], as named fiduciary to the plan.

We have concluded our investigation and, with the exception of possible violations of the ERISA section 101(i) of the blackout period notice, we have no plans for further action at this time. [Insert additional closing language as appropriate.]

The issuance of the blackout period notice by the [Plan Sponsor] on [Date of Notice], does not appear to comply with the 30-day advance notice requirements of ERISA section 101(i) or the conditions of any of the exceptions in the Department's regulation at 29 C.F.R. § 2520.101-3(b)(2)(ii). ERISA section 502(c)(7) provides that the Department may assess a civil penalty against a plan administrator of up to $100 a day from the date of the plan administrator's failure or refusal to provide notice to participants or beneficiaries in accordance with ERISA section 101(i), and further provides that each violation with respect to any single participant or beneficiary shall be treated as a separate violation. This matter will be referred to the Department's Office of the Chief Accountant to determine what further action, if any, should be taken under the civil penalty provisions in section 502(c)(7) of ERISA and the Department's regulation at 29 C.F.R. § 2560.502c-7.

Footnotes

Enforcement Programs

Figure 1
Statute of Limitations Matrix

Participant Rights Cases
Issue(s)	Date of Unlawful Practice	Analogous State Statute	Applicable Statute of Limitations Date
1.
2.
3.
4.

Figure 2
Memorandum Format for Participants’ Rights Case

Subject: (Same subject as on case opening form)

To: (Supervisor)

Investigative Plan for Subject Case

Allegation - set forth the alleged violation.
Planned Investigation - (Using Figure 3 as a guide, list the areas to be investigated.)
Time - Estimate the number of workdays necessary to complete the investigation.

Approved:

____________________
Supervisor

____________________
Date

Figure 3
Investigative Guide
ERISA Section 510

Name of employee
Address
Phone Number

Employment History

Period of service for the company. (If possible give data under next heading for each job.)
Job at the time of alleged discrimination.
1. Duties
2. Department
3. Immediate Supervisor
4. Length of service
5. Wage rate
Efficiency
1. Expressions from company
2. Statements
3. Wage increases
4. Other evidence
Seniority as compared to other employees in same category

Circumstances of Discharge or Other Adverse Action

Timing
Circumstances leading up to the discharge
Complaints or warnings before discharge
Circumstances surrounding discharge
1. Complete story
2. Whether manner of discharge was in line with customary practice
Reason given by company at time of discharge--state who gave reason and when.

Lack of work

Whether force was being reduced.
Number of other employees who were similarly discharged.
Name, dates, and reasons given for discharge.
Proportion of union and non-union employees discharged.
Method used to determine who was discharged.
Whether method was in line with usual practice.
Whether others were uniformly affected for similar cause.
1. Names, positions and dates
2. Whether the practice was the same prior to the time of alleged discrimination
Whether company plans to recall these employees.

Status of Replacement

Identity
1. Name
2. Address
3. Phone Number
Other status
1. Experience
2. Length of service
3. Rating with company

Evidence to Show Motive of Company

Threats before discrimination
Explanations after

Steps Taken After Discrimination

Application to have company reconsider
Grievance machinery
Agreement to arbitrate
Satisfaction or waiver

Inefficiency

Insubordination

Violation of Rules

Figure 4
Format for Initial Letter
Participant’s Rights

Certified Mail - Return Receipt Requested

October 14, 2005

Mr. John H. Lewis
Director, Benefit Plans and Personnel Policies
ABC Company
123 Main Street
Kansas City, Missouri 64106

Dear Mr. Lewis:

Mr. Elmo Jones, a former employee of your company, lodged a complaint with this office alleging that recent action was taken with respect to his employment for the purpose of interfering with a right to which he may become entitled under the provisions of the ABC Company Retirement Plan. If true, such action would constitute a violation of section 510 of the Employee Retirement Income Security Act of 1974 (ERISA).

Briefly, section 510 of ERISA provides that it shall be unlawful for any person to discharge, fine, suspend, expel, discipline, or discriminate against a participant or beneficiary of an employee benefit plan for the purpose of interfering with the attainment of any right to which such participant may become entitled under an employee benefit plan, Title I of ERISA, or the Welfare and Pension Plans Disclosure Act.

In his complaint, Mr. Jones alleges that when he was terminated he was within five months of completion of sufficient years of participation under his retirement plan to reach retirement status. Mr. Jones furnished to us a copy of a letter to you, dated October 4, 2004, wherein he requested that he be considered for The Investigator/Auditor named below has been assigned to represent this office in this matter. You may contact him/her for additional information or assistance.

In his complaint, Mr. Jones alleges that when he was terminated he was within five months of completion of sufficient years of participation under his retirement plan to reach retirement status. Mr. Jones furnished to us a copy of a letter to you, dated October 4, 2004, wherein he requested that he be considered for other positions with the company so he would be able to complete the necessary years of participation. He also included a copy of a letter from you, dated October 29, 2004, denying his request. Mr. Jones contends that other employees with fewer years of service than he were given other positions within the company.

You are requested to furnish this office, within 14 days from your receipt of this letter, a written statement of your company's position with respect to Mr. Jones' complaint. You are free to include all pertinent facts relating to this matter.

The Investigator/Auditor named below has been assigned to represent this office in this matter. You may contact him/her for additional information or assistance.

Your cooperation in this matter will be appreciated.

Sincerely,

Joe Johnson
Regional Director

Figure 5
Report of Investigation
Participant Rights Case

This document is the property of the Employee Benefits Security Administration.

File No. (43)

Subject:

[Complainant Last Name] v. Employer Name
Address
City, State Zip

Date:

By:

Name
Investigator/Auditor

Approved by:

EIN/PN:

Status: Closed

Predication

State the reason for case opening.

Issues and Findings

Allegation/Issue

Cite the facts that show the allegations/issue was not a violation; or in cases where violations were substantiated, cite the facts to show voluntary compliance was achieved or that other dispositive action was taken.
Allegation/Issue (Repeat as above for each allegation/issue)

Other Findings

Use this section to present facts or any other investigative activity not previously mentioned.

Figure 6
Sample Pattern Closing Letter
No ERISA Violations Detected

Dear (Plan Administrator/Fiduciary):

We have completed an inquiry involving entitlement of (name of complainant) to a benefit from (name of plan) pursuant to the Employee Retirement Income Security Act of 1974 (ERISA).

We have concluded our inquiry and no further action on this matter is contemplated at this time. (We appreciate the cooperation you and members of your staff extended to us.)

Sincerely,
Regional Director

Enclosure: SBREFA Notice

Figure 7
Participant Rights Case
Report of Investigation

This document is the property of the Employee Benefits Security Administration.

File No. (43)

Subject:

[Complainant Last Name] v. Employer Name
Address
City, State Zip

Date:

By:

Name
Investigator/Auditor

Approved by:

EIN/PN:

Status: Closed

Predication

State the reason for case opening.

Potential Jurisdictional Problems

If no jurisdictional problems are anticipated, enter “None.” If any are known, set forth the facts to identify them and document jurisdiction under Section ____________________. Any issue or potential defense relating to whether the plan is covered under ERISA should be set forth in this section.

Background

Include information, as appropriate.

Issues and Findings

Allegation/Issue

Cite the facts that show the allegations/issue was a violation.
Allegation/Issue (Repeat as above for each allegation/issue).

Other Findings

Use this section to present facts or any other investigative activity not previously mentioned.

Exhibits

All significant facts presented in the report should be supported with exhibit citations. The following procedure should be used in submitting exhibits:

State the name of the individual who is the subject of an RI or signed statement and the date of the interview.
Documents, schedules, etc., should be precisely identified.
Each supporting document should be a separate exhibit.
Multiple page exhibits should be numbered.
Exhibits should be identified by number.
All copies must be legible.
All plan documents (trust agreements, etc.) must be included as exhibits.

List of Documents and Workpapers Available in Regional Office but Not Used as Exhibits

List documents, schedules, Report of Interviews, and other materials in the Regional Office file that were not included as exhibits. Identify the date of each document.

Figure 8
Format for the Regional Director’s Cover Memo to an Action Report

To: Regional Solicitor

From: Regional Director

Subject:

Name of Plan
EIN
Case File No.

The following must be included in the body of the memo:

Give a brief synopsis of the violations.
Each violation must be supported by appropriate references to the regulations, interpretive bulletins, exemptions, variances, policy statements, previous no decisions involving similar cases, and any other authoritative references which would tend to establish the existence of the violation.
When appropriate, outline the Regional Office’s efforts to obtain voluntary compliance.
State the position of the violator(s) and other responsible plan officials with respect to each violation.
Discuss the Regional Director’s recommendations for the final disposition of the case. If a partial settlement offer has been made the Regional Director should comment on its acceptability.

cc: File

Footnotes

See 29 USC Section 1140.
The fact that the complainant is not familiar with plan provisions does not necessarily mean the complaint is not valid. The lack of knowledge may be due to a failure by the plan administrator to provide proper disclosure.
Because ERISA Section 413 governs limitations on actions brought under Part 4 of Title I, its 3- and 6-year limitations are inapplicable to Section 510 violations. Among the circuit courts, the analogous state laws appear to be “wrongful termination” or “retaliatory discharge.”
Alternatively, a RO may decide to preserve the identity of the complainant and issue a general initial contact letter.

Figure 1
Initial Contact Letter
Draft
Office Letterhead

Certified Mail No.
Return Receipt Requested

In reply, please refer to our file no. (47)

[Date]

[Subject]
[Subject's Address]

RE: Investigation pursuant to ERISA § 411

Dear [xxxx]:

The United States Department of Labor is responsible for the administration and enforcement of Title I of the Employee Retirement Income Security Act of 1974, as amended (ERISA), 29 U.S.C. § 1001 et seq. Investigative authority is vested in the Secretary of Labor by ERISA §§ 504 and 506(b), 29 U.S.C. §§ 1134 and 1136(b), respectively.

Under ERISA § 411, persons who have been convicted of certain enumerated crimes are debarred for a period of thirteen (13) years from serving in various capacities related to employee benefit plans. Among the crimes requiring debarment is [xx U.S.C. § xxxx], of which you were convicted in [year]. The thirteen year debarment period begins on the later of the date of conviction or the end of any imprisonment that may have resulted from the conviction. According to our records, your debarment period began on [date], which is [the date of your conviction] (or) [the date of your release from the imprisonment resulting from your conviction].

This office is conducting an investigation to determine your compliance with the bar imposed by ERISA § 411. In doing so, we hope to protect your privacy to the extent possible while fulfilling our responsibilities under the statute. Accordingly, we seek your voluntary cooperation with our inquiry. Specifically, we request that you promptly furnish the documentation listed in the attachment to this letter, and that you subsequently agree to be interviewed, possibly via telephone, regarding your employment history as it pertains to the § 411 bar. We may also request that, after you have had an opportunity to review a written summary of the information obtained in our investigation, you sign under oath a declaration that the information contained in the summary is correct.

If the information and documentation you provide is sufficient to establish your compliance with the bar, it may eliminate altogether our need to seek or to corroborate this information with third parties (e.g., employers, neighbors, etc.)

Attached to this letter is the documentation we request at this time. Please deliver these items to the undersigned within three weeks of your receipt of this letter. You may provide the documentation in paper form or electronically in PDF format.

Finally, we ask that you provide a telephone number and time of day when you would prefer that we call you, when necessary, to discuss this inquiry.

Thank you in advance for your cooperation. If you have any questions, please do not hesitate to contact me at [tel. no.] or [email address]

Sincerely,
Case Investigator

Please Provide the Following Documentation as Discussed in the Accompanying Letter (Additional documentation may be required)

Documents sufficient to establish your full name, date of birth, and Social Security Number
Documents sufficient to establish your current home address and all prior home addresses dating back to the effective date of your debarment* but no more than 3 years
Documents sufficient to establish the names and addresses of all current and former employers, including documents identifying all supervisors, dating back to the effective date of your debarment but no more than 3 years. Identify all periods of self-employment and unemployment. Account for all periods of time
Copies of all federal tax returns dating back to the effective date of your debarment but no more than 3 years
Copies of all Form W-2s and all employment-related Form 1099s dating back to the effective date of your debarment but no more than 3 years
Copies of all employment contracts and personal service contracts dating back to the effective date of your debarment but no more than 3 years
For each position or job held, provide the job title and a complete description of the work actually performed in the position or job. To the extent any work directly or indirectly involved any employee benefit plan, fully describe the exact nature of the work you performed with respect to the employee benefit plan

* This date is set forth in the accompanying letter.

Figure 2
Report of Investigation
U.S. Department of Labor
Employee Benefits Security Administration

This document is the property of the Employee Benefits Security Administration. It is not to be disclosed to unauthorized persons.

File No.

Subject: (Name and Address of Prohibited Person)

Date:

By:

Investigator/Auditor

Approved by:

EIN/PN:

Status: Closed

Predication - State the reasons for case opening and conducting the investigation.
Issues and Findings - Cite the facts which show:
1. Disqualifying Offense - Describe the offense for which the subject was convicted and consequently barred from employment in employee benefit plans under section 411 of ERISA.
2. Notification of Disbarment - Describe any known notifications of disbarment, including proof of receipt. If the subject indicates non-receipt, describe the actions taken to officially notify the subject of debarment, including proof of receipt.
3. Nature of Current Employment of Applicant - Include a description of any employment position. Be specific about all duties and authority for which the subject may be responsible as they relate to employee benefit plans. Provide sufficient facts showing that the employment was or was not prohibited.
4. Actions Taken - In cases where prohibited employment is found, cite the facts showing that VC was achieved, if applicable, or that other dispositive action was taken.
Other Findings - This section can be used to present facts or any other investigative activity not previously mentioned.

[To be used at the discretion of the Regional Director]

Distribution:

National Office:

Figure 3
Part 4 - Procedure Governing Applications for Certificates of Exemption under the Labor-Management Reporting and Disclosure Act of 1959, and the Employee Retirement Income Security Act of 1974

Sec.
4.1 Definitions
4.2 Who may apply for Certificate of Exemption
4.3 Contents of application
4.4 Supporting affidavit; additional information
4.5 Character endorsements
4.6 Institution of proceedings
4.7 Notice of hearing; postponements
4.8 Hearing
4.9 Representations
4.10 Waiver of oral hearing
4.11 Appearance; testimony; cross examination
4.12 Evidence which may be excluded
4.13 Record of decision. Receipt of documents comprising record; timing and extension
4.14 Administrative law judge's recommended decision; exceptions thereto; oral argument before Commission
4.15 Certificate of Exemption
4.16 Rejection of application
4.17 Availability of decisions

Authority: Secs. 504, 606, Stat. 536, 540 (29 U.S.C. 504, 526): and Secs. 411, 507A. 88 Stat. 887, 894, (29 U.S.C. 1111, 1137).

Source: 44 FR 6890, Feb. 2, 1979, unless otherwise noted.

Cross Reference: For Organization Statement, U.S. Parole Commission, see Subpart V of Part O of this chapter.

§ 4.1 Definitions

As used in this part:

Labor Act means the Labor-Management Reporting and Disclosure Act of 1959 (73 Sta. 519).
Pension Act means the Employee Retirement Income Security Act of 1974 (Pub. L. 94-406)(88 Sta. 829)
Act means both of the above statutes.
Commission means the United States Parole Commission.
Secretary means the Secretary of Labor or his designee.
For proceeding under the "Labor Act"
1. Employer means the labor organization or person engaged in an industry or activity affecting commerce, or group or association of employers dealing with any labor organization, which an applicant under Section 4.2 desires to serve in a capacity for which he is ineligible under section 504(a) of the "Labor Act".
2. All other terms used in this part shall have the same meaning as identical or comparable terms when those terms are used in the "Labor Act".
For proceedings under the "Pension Act"
1. Employer means the employee benefit plan with which an applicant under § 4.2 desires to serve in a capacity for which he is ineligible under section 411(a) of the "Pension Act" (29 U.S.C. section 1111).
2. All other terms used in this part shall have the same meaning as identical or comparable terms when those terms are used in the "Pension Act".

§ 4.2 Who may apply for Certificate of Exemption

Any person who has been convicted of any of the crimes enumerated in section 504(a) of the "Labor Act" whose service, present or prospective, as described in that section because of such a conviction or a prison term resulting therefrom; or any person who has been convicted of any of the crimes enumerated in section 411(a) of the "Pension Act" (29 U.S.C. section 1111) whose service, present or prospective, as described in that section is or would be prohibited by that section because of such a conviction or a prison term resulting therefrom, may apply to the Commission for a Certificate of Exemption from such a prohibition under the applicable Act.

§ 4.3 Contents of applications

A person applying for a Certificate of Exemption shall file with the Office of General Counsel, U.S. Parole Commission, 5500 Friendship Boulevard, Chevy Chase, Maryland 20815-7286, a signed application under oath, in seven copies, which shall set forth clearly and completely the following information:

The name and address of the applicant and any other names used by the applicant and dates of such use.
A statement of all convictions and imprisonments, which prohibit the applicant's service under the provisions of the applicable Act.
Whether any citizenship rights were revoked as a result of conviction or imprisonment and if so the name of the court and date of judgment thereof and the extent to which such rights have been restored.
The name and location of the employer and a description of the office or paid position, including the duties thereof, for which a Certificate of Exemption is ought.
A full explanation of the reasons or grounds relied upon to establish that the applicant's service in the office or employment for which a Certificate of Exemption is sought would not be contrary to the purposes of the applicable Act.
A statement that the applicant does not, for the purpose of the proceeding, contest the validity of any conviction.

(28 U.S.C. 509 and 510, 5 U.S.C. 301)
(44 FR 6890, Feb. 2, 1979, as amended at 46 FR 52354, Oct. 27, 1981)

§ 4.4 Supporting affidavit; additional information

Each application filed with the Commission must be accompanied by a signed affidavit, in 7 copies, setting forth the following concerning the personal history of the applicant:
1. Place and date of birth. If the applicant was not born in the United States, the time of first entry and port of entry, whether he/she is a citizen of the United States, and if naturalized, when, where and how he/she became naturalized and the number of his Certificate of Naturalization.
2. Extent of education, including names of schools attended.
3. History of marital and family status, including a statement as to whether any relatives by blood or marriage are currently serving in any capacity with an employee benefit plan, or labor organization, group or association of employers dealing with labor organizations or industrial labor relations group, or currently advising or representing any employer with respect to employee organizing concerted activities or collective bargaining activities.
4. Present employment, including office or offices held with a description of the duties thereof.
5. History of employment, including military service, in chronological order.
6. Licenses held at the present or at any time in the past five years, to possess or carry firearms.
7. Veterans' Administration claims number and regional office handling claim, if any.
8. A listing (not including traffic offenses for which a fine of not more than $25 was forfeited) by date and place of all arrests, convictions for felonies, misdemeanors, or offenses and all imprisonment or jail terms resulting therefrom, together with a statement of the circumstances of each violation which led to arrest of conviction.
9. Whether applicant was ever on probation or parole, and if so the names of the courts by which convicted and the dates of conviction.
10. Names and location of all employee benefit plans, labor organizations or employer groups with which the applicant has ever been associated or employed, and all employers or employee benefit plans which he has advised or represented concerning employee organizing, concerted activities, or collective bargaining activities together with a description of the duties performed in each such employment or association.
11. A statement of applicant's net worth, including all assets held by him or in the names of others for him, the amount of each liability owed by him or by him together with any other person and the amount and source of all income during the immediately preceding five calendar years plus income to date of application.
12. Any other information that the applicant feels will assist the Commission in making its determination.
The Commission may require of the applicant such additional information as it deems appropriate for the proper consideration and disposition of his application.

§ 4.5 Character endorsements

Each application filed with the Commission must be accompanied by letters or other forms of statement (in three copies) from six persons addressed to the Chairman, U.S. Parole Commission, attesting to the character and reputation of the applicant. The statement as to character shall indicate the length of time the writer has known applicant, and shall describe applicant's character traits as they relate to the position for which the exemption is sought and the duties and responsibilities thereof. The statement as to reputation shall attest to applicant's reputation in his community or in his circle of business or social acquaintances. Each letter or other form of statement shall indicate that it has been submitted in compliance with procedures under the respective Act and that applicant has informed the writer of the factual basis of his application. The persons submitting letters or other forms of statement shall not include relatives by blood or marriage, prospective employers, or persons serving in any official capacity with an employee benefit plan, labor organization, group or association of employers dealing with labor organizations or industrial labor relations groups.

§ 4.6 Institution of proceedings

All applications and supporting documents received by the Commission shall be reviewed for completeness by the Office of General Counsel of the Parole Commission and, if complete and fully in compliance with the regulations of this part, the Office of General Counsel shall accept them for filing. Applicant and/or his representative will be notified by the Office of General Counsel of any deficiency in the application and supporting documents. The amount of time allowed for deficiencies to be remedied will be specified in said notice. In the event such deficiencies are not remedied within the specified period or any extension thereof, granted after application to the Commission in writing within the specified period, the application shall be deemed to have been withdrawn and notice thereof shall be given to applicant.

§ 4.7 Notice of hearing postponements

Upon the filing of an application, the Commission shall: (a) Set the application for a hearing on a date within a reasonable time after its filing and notify the applicant of such date by certified mail; (b) Give notice, as required by the respective Act, to the appropriate State, County or Federal prosecuting officials in the jurisdiction or jurisdiction in which the applicant was convicted that an application for a Certificate of Exemption has been filed and the date for hearing thereon; and (c) Notify the Secretary that an application has been filed and the date for hearing thereon and furnish him copies of the application and all supporting documents. Any party may request a postponement of a hearing date in writing from the Office of General Counsel at any time prior to ten (10) days before the scheduled hearing. No request for postponement other than the first for any party will be considered unless a showing is made of cause entirely beyond the control of the requester. The granting of such requests will be within the discretion of the Commission. In the event of a failure to appear on the hearing date as originally scheduled or extended, the absent party will be deemed to have waived his right to a hearing. The hearing will be conducted with the parties present participating and documentation, if any, of the absent party entered into the record.

§ 4.8 Hearing

The hearing on the application shall be held at the offices of the Commission in Washington, D.C., or elsewhere as the Commission may direct. The hearing shall be held before the Commission, before one or more Commissioners, or before one or more administrative law judges appointed as provided by section 11 of the Administrative Procedure Act (5 U.S.C. 3105) as the Commission by order shall determine. Hearings shall be conducted in accordance with sections 7 and 8 of the Administrative Procedure Act (5 U.S.C. 556, 557).

§ 4.9 Representation

The applicant may be represented before the Commission by any person who is a member in good standing of the bar of the Supreme Court of the United States or of the highest court of any State or territory of the United States or the District of Columbia and who is not under any order of any court suspending, enjoining, restraining or disbarring him from, or otherwise restricting him in, the practice of law. Whenever a person acting in a representative capacity appears in person or signs a paper in practice before the Commission, his personal appearance or signature shall constitute a representation to the Commission that under the provisions of this part and applicable law he is authorized and qualified to represent the particular person in whose behalf he acts. Further proof of a person's authority to act in a representative capacity may be required. When any applicant is represented by an attorney at law, any notice or other written communication required or permitted to be given to or by such applicant shall be given to or by such attorney. If an applicant is represented by more than one attorney, service by or upon any one of such attorneys shall be sufficient.

§ 4.10 Waiver of oral hearing

The Commission upon receipt of a statement from the Secretary that he does not object, and in the absence of any request for oral hearing from the others to whom notice has been sent pursuant to §4.7 may grant an application without receiving oral testimony with respect to it.

§ 4.11 Appearance; testimony; cross-examination

The applicant shall appear and, except as otherwise provided in §4.10, shall testify at the hearing and may cross-examine witnesses.
The Secretary and other to whom notice has been sent pursuant to §4.7 shall be afforded an opportunity to appear and present evidence and cross-examine witnesses, at any hearing.
At the discretion of the Commission or presiding officer, other witnesses may testify at the hearing.

§ 4.12 Evidence which may be excluded

The Commission or officer presiding at the hearing may exclude irrelevant, untimely, immaterial or unduly repetitious evidence.

§ 4.13 Record for decision, receipt of documents comprising record; timing and extension

The application and all supporting documents, the transcript of the testimony and oral argument at the hearing, together with any exhibits received and other documents filed pursuant to these procedures and/or the Administrative Procedures Act shall be made parts of the record for decision.
At the conclusion of the hearing the presiding officer shall specify the time for submission of proposed findings of fact and conclusions of law (unless waived by the parties), transcript of the hearing and supplemental exhibits, if any. He shall set a tentative date for the recommended decision based upon the timing of these preliminary steps. Extensions of time may be requested by any party, in writing from the Parole Commission. Failure of any party to comply with the time frame as established or extended will be deemed to be a waiver on his part of his right to submit the document in question. The adjudication will proceed and the absence of said document and reasons thereof will be noted in the record.

§ 4.14 Administrative law judge's recommended decision; exceptions thereto; oral argument before Commission

Whenever the hearing is conducted by an administrative law judge, at the conclusion of the hearing he shall submit a recommended decision to the Commission, which shall include a statement of findings and conclusions as well as the reasons therefore. The applicant, the Secretary and others to whom notice has been sent pursuant to §4.7 may file with the Commission, within 10 days after having been furnished a copy of the recommended decision, exceptions thereto and reasons in support thereof. The Commission may order the taking of additional evidence and may request the applicant and others to appear before it. The Commission may invite oral argument before it on such questions as it desires.

§ 4.15 Certificate of Exemption

The applicant, the Secretary and others to whom notice has been sent pursuant to §4.7 shall be served a copy of the Commission's decision and order with respect to each application. Whenever the Commission's decision is that the application be granted, the Commission shall issue a Certificate of Exemption to the applicant. The Certificate of Exemption shall extend only to the stated employment with the prospective employer named in the application.

§ 4.16 Rejection of application

No application for a Certificate of Exemption shall be accepted from any person whose application for a Certificate of Exemption has been withdrawn, deemed withdrawn due to failure to remedy deficiencies in a timely manner, or denied by the Commission within the preceding 12 months.

§ 4.17 Availability of decisions

The Commission's Decisions under both Acts are available for examination in the Office of the U.S. Parole Commission, 5550 Friendship Boulevard, Chevy Chase, Maryland 20815-7286. Copies will be mailed upon written request to the Office of General Counsel, U.S. Parole Commission, at the above address at a cost of ten cents per page.

(28 U.S.C. 509 and 510, 5 U.S.C. 301);(44 FR 6890, Feb. 2, 1979, as amended at 46 FR 52354, Oct. 27, 1981)

Figure 4
Report of Investigation
Sample Format
U.S. Department of Labor
Employee Benefits Security Administration

This document is the property of the Employee Benefits Security Administration. Its contents are not to be disclosed to unauthorized persons.

File No.

Subject:

(Name and Address of Applicant)

Date

Name and address of Plan

By Investigator/Auditor

EIN/PN

Approved by

Status

Predication

State the reason for the case opening and for conducting an investigation.
Issues and Findings

Cite the facts, which show:
1. Nature of Employment Sought by Applicant
  
  Include a description of the position, including the duties for which the Certificate of Exemption is sought.
  
  Establish the validity or lack of validity of the reasons or grounds relied on to show the applicant's employment (for which the Certificate of Exemption is sought) would not be contrary to the purpose of ERISA. Include a statement concerning what access, if any, the applicant will have to plan funds and the degree of authority and discretion he/she will have in the position.
2. Arrests, Convictions and Rehabilitation
  
  Verify applicant's statements in his/her supporting affidavit as to his/her history of arrests and convictions, which prohibit applicant's service to an employee benefit plan under Section 411 of ERISA.
  
  Under this heading, report views of the prosecuting officials, arresting officers, and judges, regarding the application for a Certificate of Exemption and include as exhibits. Include details of any mitigating or aggravating circumstances which might have been involved with regard to the factors listed in paragraph 2 of this Chapter.
3. Disqualifying Offense
  
  Describe the offense for which the subject was convicted and consequently barred from employment in employee benefit plans under section 411 of ERISA.
  
  Discuss the subject's involvement in the offense. Include the extent of the subject's participation. Establish information such as whether the subject was an accessory or the principal perpetrator.
4. Nature of the Employment Offered
  
  Describe the position for which the applicant is seeking an exemption. Be specific about the duties and authority for which the subject will be responsible as they relate to employee benefit plans.
5. Personal Information
  
  Under this heading, report the results of the investigation into the accuracy of the sworn statements made by the applicant in his/her supporting affidavit and not previously mentioned in the report. This should include but not be limited to: birth date, extent of education, marriage and family status, present employment, past employment, military service, licenses issued, criminal record and probation or parole (if not previously reported in Part B above), labor organizations (with which applicant has been associated or employed), and financial background including net worth.
6. Neighborhood Investigation
  
  Include statements of neighbors, landlord and superintendent (where applicable) as to applicant's status in the neighborhood and to verify applicant's residence.
7. Credit Check
  
  Include reports of local credit bureaus and results of investigations at county clerk's offices regarding judgments against the applicant.
8. Character References
  
  Include as exhibits interviews conducted with individuals who supported the applicant's application for exemption.

Exhibits

All significant facts presented in the report should be supported with exhibit citations. The following procedure should be used in submitting exhibits:

State the name of the individual who is the subject of an Report of Interview or signed statement and the date of the interview.
Documents, schedules, etc., should be precisely identified.
Each supporting document should be a separate exhibit.
Multiple page exhibits should be numbered.
Exhibits should be identified by number.
All copies must be legible.
All plan documents (trust agreements, etc.) must be included as exhibits.

List of Documents and Workpapers Available in Regional Office but Not Used as Exhibits

List documents, schedules, Reports of Interview, etc., in the Regional Office file that were not included as exhibits. Identify each document by the date(s) covered.

Figure 5
Format for Regional Director's Cover Memo for an Report Of Investion in a Prohibited Persons Case - Program 47
U.S. Department of Labor
Employee Benefits Security Administration

Memorandum For: SOL Counsel

From: Regional Director

XYZ Regional Office

Subject: Name, Address of Applicant

Name, Address and EIN of Plan

First paragraph – briefly state the basis for opening the case.

Second paragraph – briefly state the nature of the original conviction and any mitigating circumstances involved in sentencing.

Third paragraph – briefly state investigative results, specifically commenting on the applicant's efforts at rehabilitation.

Fourth paragraph – briefly state the recommendation of the Regional Office as to whether the Department of Labor should contest the application.

cc: File, Deputy Director for Criminal Enforcement

Footnotes

(Figure 1)
Memorandum Format for Program 48 Investigative Plan

Subject:

Name of Plan
Location
EIN
File No.

To:

Supervisor

Investigative Plan for Subject Case

Results of Search of Indices and Exemption Applications

Summarize any pertinent information in the Regional Office files, which might have a bearing on the investigation.
Analysis and Scope of Investigation
1. Allegations/Investigative Leads/Basis for Investigation.
  
  Analyze each allegation, investigative lead, or area of investigation within the context of the applicable sections of the statute, interpretations, and regulations. Identify each allegation, investigative lead, or area of investigation seriatim using the following general outline:
  1. Set forth the issue being investigated, being as concise as possible without sacrificing the meaning.
    1. Indicate which sections of ERISA, if known, appear to have been violated, including applicable references to the statute, regulations, and/or agency guidance.
    2. List the elements of proof needed to establish that a violation has occurred.
    3. Describe the scope of the proposed inquiry. (This section of the work plan should be used to limit, if possible, the expected duration of the inquiry, and to estimate when the investigation should be closed if no evidence of potential violations is found. A well-planned investigation should estimate how much time and effort should be expended before the costs of pursuing the investigation outweigh its potential benefits).
Planned Investigative Activity

By issue, describe what records will be reviewed and/or what interviews will be conducted and what information and documentation will be developed. Use the following outline to describe the planned investigative activity.
1. General.
  
  Set forth any investigative activity not related to resolving a specific issue such as verifying the adequacy of the plan's bond.
2. Allegation/Lead/Area of Investigation.
  
  Identify all the activity needed to fully investigate the allegation/lead.
3. Allegation/Lead/Area of Investigation #2.
  
  Repeat as in B, for all allegations/leads.

Investigator's/Auditor's Name, Signature, and Date

Approved:

____________________
(Initials of Supervisor)

Date: ____________________

(Figure 2)
Memorandum Format for Updated Fiduciary Case Investigative Plan

Subject:

Name of Plan
Location
EIN
File No.

To:

Supervisor

Update of Investigative Plan

Changes in Original Plan

Fully describe any deletions from the original plan together with the reasons for the deletions.
Additional Planned Investigative Activity

Fully describe changes in direction or what additional investigation will be conducted.

Investigator's/Auditor's Name, Signature, and Date

Approved:

___________________
(Initials of Supervisor)

Date: ___________________

(Figure 3)

Bonding Checklist

Checklist
	Yes	No
1. Does a separate trust fund exist?
2. Are there insurance or annuity contracts?
3. Are there separate accounts in the books of the employer or do separate funds or other properties exist in the name of the Plan?
Note: If item 1 or 3 is answered "Yes," bonding is usually required. If item 2 is answered "Yes," bonding may be required. Determine whether insurance dividends belong to the Plan or to the Employer. If they belong to the Plan, bonding is required. If cash surrender values exist and the Plan can obtain those values, bonding is required.
4. Are benefits paid from the general assets of the plan Sponsor?
5. Is there any segregation of the Plan Funds?
6. Are there separate accounts on the books or separate books of account for the Plan?
Note: If item 4 is answered "Yes" and items 5 and 6 are "No," the Plan is unfunded and bonding is not required.
7. Do any trustees or Plan employees have: a. Physical possession of Plan assets? b. The power to obtain physical possession of plan assets? c. The power to transfer assets? d. The authority to disburse Plan funds directly or indirectly? e. The authority to endorse checks? f. The authority to make investments?
Note: If any of items 7a through 7f is answered "Yes," "handling" of Plan funds is indicated and bonding is required for each individual who has the above authority. If a corporate trustee holds the Plans assets, but the Plan trustees can direct the payment of benefits by the corporate trustee or direct the investments to be made by the corporate trustee, the Plan trustees "handle" funds and bonding is required.
8a. Are any of the fiduciaries registered as a broker or a dealer under section 15(b) of the Securities Exchange Act? 8b. Are any of the fiduciaries an entity authorized to exercise trust powers or to conduct an insurance business?
Note: If item 8a or 8b is answered "Yes," the fiduciary or entity may not need to be covered by a bond. See ERISA §412 for details.
9. Does the bond provide for payment to the Plan in the event of loss?
Note: The Plan must be named as an "insured" and the pay over rider must be attached unless the Plan is the sole insured under the bond. The definition of employee in the bond must cover all persons who "handle" funds.
10. How many Plans are covered by the bond? ________________
11. How many non-plan entities are covered by the bond? ________________
12. Is the bonding company listed in Treasury Circular 570? https://www.fiscal.treasury.gov/fsreports/ref/suretyBnd/c570.htm Name of Company ______________________________ Policy Lapse Date ______________________________
13. Is the Plan named as the insured?
14. If more than one Plan or Plan(s) and the Plan Sponsor are covered, is a pay-over rider attached?
15. If the bond contains a deductible, is an elimination of deductible rider attached with respect to the Plan?
16. Does the bond protect against fraud or dishonesty?
17. Does the bond cover all persons who "handle" funds?
Note: Without a "Definition of Employee" rider, a bond generally excludes "officers, Directors, and Trustees" from coverage.
18. Does the bond have a one-year discovery period?
19. Does the Plan have fiduciary liability insurance?
20. Does the Plan hold employer securities?
Note: In cases where the plan holds employer securities for plan years beginning after December 31, 2007, the maximum bond is increased to $1,000,000.

Bonding Computation Sheet

The amount of bond shall be fixed at the beginning of each reporting year and is determined by the funds "handled" by plan officials during the preceding year.

A. Total assets, beginning of preceding year
Asset	Total
1. Cash (on hand and in banks)	________________
2. Governmental securities	________________
3. Corporate debt securities	________________
4. Corporate stocks (common and preferred)	________________
5. Shares in registered investment companies	________________
6. Real Estate	________________
7. Mortgages	________________
8. Loans other than mortgages	________________
9. Value of interest pooled fund	________________
10. Value of unallocated group annuity contracts, cash surrender values	________________
11. Other assets	________________
Total A	________________

B. Receipts during preceding reporting year
Receipts	Total
1. Contributions	________________
2. Interest	________________
3. Dividends	________________
4. Rents	________________
5. Profit from sale of assets (sale price less market value at beginning of preceding reporting year or value at transactions date if purchased during the preceding year) Note: The proceeds (profit or loss) from the sale of assets have not been included in this bonding computation since it is not possible to identify the necessary valuations to obtain this specific computation from the annual report.	________________
6. Other	________________
Total, B	________________
Total, A and B	________________

C. Applicable Adjustments
Applicable Adjustments	Total
1. Accrual basis accounting: Plus accts. receiv. – beginning of year Less accts. receiv. – end of year	________________
2. Small plan (using audit waiver) (Note: the small plan waiver calculation is determined as of the end of the preceding year.) Year ending:	________________
a. Qualifying employer securities	________________
b. Permitted participant loans	________________
c. Total assets held by:	________________
i. Bank or financial institution ii. State-qualified insurance company iii. Registered broker-dealer iv. Other entity authorized to act as trustee for an IRA	________________
d. Shares held by registered investment comp.	________________
e. Participant directed assets that appear on a statement issued by an entity described in (c)	________________
f. Sub-total: (qualifying plan assets)	________________
Plan total (A):	________________
Divide sub-total by plan total	________________

D. Required Bond
Required Bond	Total
1. General Required Bond: Minimum $1,000, Maximum $500,000	________________
2. If the plan holds employer securities, for plan years beginning after December 31, 2007, the maximum bond is $1,000,000	________________
3. Small plan (using audit waiver): If the percentage in C.2.f is 95% or more, general bonding rules apply: If the percentage in C.2.f is less than 95%, the bond must be the greater of the general required bond or the amount of the non-qualifying assets: (Reg. §2520.104-46)**	________________

** Note: If a small plan is required to have a bond in the higher amount of the non-qualifying assets, the correction is not merely to obtain a bond in the future, but to either obtain one retroactively or to conduct an audit for the years in which the plan failed to have the proper bond.

Prepared by:

Date Prepared:

Case #:

Case Name:

(Figure 4)
Reporting and Disclosure Checklist

Checklist
	Yes	No
A. Reporting
1. Is the plan exempt from reporting requirements? If yes, explain.
B. Summary Plan Description (SPD)
1. Does the SPD meet the style, format and content requirements? (Regs. 2520.102-2 and 3)
2. Date of SPD: _____________ Is SPD more than five years old? If yes, explain. (Regs. 2520-104b)
3. Has SPD been provided to participants and beneficiaries receiving benefits within 120 days after the Plan is subject to ERISA or, for new participants, within 90 days after becoming covered by the Plan? (Regs. 2520-104b)
C. Material Modifications
If material modifications occurred, has a Summary of Material Modifications been disclosed to participants and beneficiaries within 210 days after the end of the Plan year in which the change was made? (Regs. 2520.104a-7 and 2520.104b-3).
D. Summary Annual Reports (SAR)
Has SAR been disclosed to Plan participants and beneficiaries within nine months after the close of the plan year? (Regs. 2520.104b-10)
E. Annual Reports (Form 5500 Series) (AR)
1. Have ARs been filed with the DOL/IRS within seven months after the end of the Plan year, unless an extension is filed? (Regs. 2520.104a-5)
2. Were the appropriate schedules included? (Regs. 2520.103-1)
F. Mergers, Consolidations, Transfers, Terminations, PBGC Insurance
1. If applicable, has form 5310 (Application for Determination upon Termination; Notice of Merger, Consolidation or Transfer of Plan Assets or Liabilities; Notice of Intent to Terminate) been filed with the IRS and/or PBGC? (Instructions for Form 5310)
2. If applicable, has a "Final" AR (Form 5500 Series) been filed upon complete distribution of all assets?
3. If applicable, has PBGC been notified of a merger, transfer of assets or liabilities or termination of a Multi-employer Plan covered by the PBGC Insurance Program?
4. For Defined Benefit Plans: Has form PBGC-1 been filed?
G. Disclosure - Other
1. Are copies of the Plan Description, latest Annual Report and documents under which the Plan was established or operated made available to Plan participants at the principal office of the administrator? (Regs. 2520.104b-1)
2. For plans that charge for documents, is the charge reasonable? (Regs. 2520.104b-30)
3. Does the Plan respond to written disclosure requests within 30 days? (Sec. 502(c)(1))
4. For those plans to which the vesting standards apply, has a statement concerning the nature, amount, and form of deferred vested benefits been provided to those participants that have terminated employment or had a one-year break in service? (Sec. 105(c))
5. For participants or beneficiaries with claim denials, does the Plan provide notice of denial within required timeframes? (Reg. 2560.503-1(i)(2))
6. For health plans covering more than 20 employees:
a. Has each covered employee and his or her spouse been notified of their continuation rights under COBRA?
b. Is each new employee and his or her spouse notified of their rights under COBRA at the time they become covered for health insurance under the Plan?
c. Does the Plan provide written notification to employees and their spouses of their rights to continued coverage under COBRA within 14 days of the plan administrator being notified that a qualifying event has occurred?

(Figure 5)
Investigative Guidelines
Individual Benefit Statements

Individual Benefit Statement Compliance Checklist
Participant-Directed Individual Account Plans

[For use with plans that permit participants to direct the investment of assets held in their individual account]

Timing:

1. Within what period of time following the end of the quarter(s) were statements furnished to participants? _____________

2. If statements were furnished within a period longer than 45 days following the end of the quarter(s): a) Within what period were statements (typically) furnished? _________________. b) What was the reason given for taking longer than 45 days? __________________________________________________________________________.

3. With regard to furnishing benefit statements to plan beneficiaries, were statements generally furnished within a reasonable period of time (such as 30 days) following receipt of a written request, taking into account the circumstances of the request? Yes ____ No ________. If “No”, what was the reason given for the longer period? __________________________________________________________________________.

Content:

Did the benefit statement furnished or made available to participants contain the following information:

Yes

1. Total accrued benefits (based on latest available information)

____

2. Nonforfeitable benefits or earliest date on which benefits would become nonforfeitable (based on latest available information)

____

3. Explanation of permitted disparity or floor offset, if applicable

____

4. Value of each investment (as of most recent valuation date)

____

5. Explanation of any limitations or restrictions imposed by plan (rather than investment funds) on right to direct investments

____

6. Explanation of importance of well-balanced and diversified portfolio (Note: model (not required) language provided in FAB 2006-03)

____

7. A statement referring participants to DOL website for sources of information on investing and diversification (Note: website link provided in FAB 2006-03)

____

Individual Benefit Statement Compliance Checklist
Individual Account Plans Without Participant Direction

[For use with plans that do not permit participants to direct the investment of assets held in their individual account. Note: the ability to obtain a participant loan is not participant direction for this purpose]

Timing:

1. Within what period of time following the end of the year were statements furnished to participants? _____________

2. If statements were furnished within a period longer than 45 days following the end of the year: a) Within what period were statements (typically) furnished? _________________. b) What was the reason given for taking longer than 45 days? __________________________________________________________________________.

Content:

Did the benefit statement furnished or made available to participants contain the following information:

Yes

1. Total accrued benefits (based on latest available information)

____

2. Nonforfeitable benefits or earliest date on which benefits would become nonforfeitable (based on latest available information)

____

3. Explanation of permitted disparity or floor offset, if applicable

____

4. Value of each investment (as of most recent valuation date)

____

Individual Benefit Statement Compliance Checklist
Defined Benefit Plans

Election:

Defined benefit plans are required to furnish benefit statements to participants and beneficiaries at least once every 3 years OR such plans may elect to furnish at least once a year a notice informing participants of the availability of a pension benefit statement and how to obtain such a statement.

Plan has elected to furnish benefit statements every three years (earliest statement required to comply with the new requirements would be due for the 2009 plan year). Yes ____ No ____
(Note: If the plan is furnishing or intends to furnish benefit statements annually, although not required to do so, answer “Yes.”)

If “No,” has the plan provided (or does the plan intend to) furnish an annual notice (Note: first required annual notice would be for the 2007 plan year). Yes ____ No _____
Date on which notice was (or will be) furnished _________________________

Annual Notice Alternative:

If a plan has elected to furnish an annual notice, does the annual notice:

1. Explain that participants have a right to request and receive a pension benefit statement? Yes ____ No ____

2. Explain how participants can request and receive a pension benefit statement from the plan? Yes ____ No ____

Pension Benefit Statement:

Did the plan provide a pension benefit statement to each participant with nonforfeitable benefits and who is employed by the employer maintaining the plan at the time the statement is furnished? Yes ____ No _____

Did the benefit statement furnished or made available to participants contain the following information:

Yes

1. Total accrued benefits (based on latest available information)

____

2. Nonforfeitable benefits or earliest date on which benefits would become nonforfeitable (based on latest available information)

____

Statements Upon Request

1. With regard to furnishing benefit statements to participants and beneficiaries following receipt of a written request, were statements generally furnished within a reasonable period of time (such as 30 days) following receipt of a written request, taking into account the circumstances of the request? Yes ____ No ____. If “No”, what was the reason given for the longer period? __________________________________________________________________________.

2. Did the furnished statements contain the “content” information described above? Yes ____ No ____

(Figure 6)
Investigation Guidelines

Part I. Background Information

Obtain the following data for the pension or welfare plan which has been selected for investigation.

Note: You need not complete the following items to the extent that the data is already in your possession; for example, on Form 5500.

A. General

Plan name _____________________________________

Plan sponsor name _____________________________

Plan administrator name _______________________

Sponsor EIN ________________ Plan number ______

Plan address ___________________________________

________________________________________________

Contact person ______________ Telephone ____________

B. Coverage (describe types and locations of employees covered by the plan)

number of participants _________

active _________

retired or separated _________

Type of Plan

total _________

C. Type of Plan

D. Contributions

Sponsor (number and types of employers, unions or other organizations contributing to plan)

_____________________________________________________

Participants contribute ____ yes ____ no

E. Funding

____ trusteed

____ insured

____ both trusteed and insured from sponsor assets

name and location of trust fund

__________________________________________

insurance carriers and insurance vehicles

_________________________________________

total plan assets $ ___________ at (date)______________

F. Plan Managers (include named fiduciaries)

Plan Managers

Name

______________________________________

Title (officer, trustee, committee member, etc.)

______________________________________

G. Service Providers (attorney, accountant, actuary, insurance agent, contract administrator, investment manager, etc.)

Service Providers

Name

_________________________

Company

_________________________

Type of Service

_________________________

H. Verifications

date of most recent audit by outside auditors______________

date of most recent review by internal auditors____________

date of most recent actuarial valuation___________________

I. Plan Documents

List the basic documents, which establish and govern the plan and/or trust

____________________________________________________________

J. Plan Records

List the basic books and records of the plan, e.g., contribution records, participant hours/earnings/ benefits, records, investment policies, claim forms and files, bank statements, trust reports, cash books, journals, ledgers, inventories, investment reports, etc

___________________________________________________________________

K. List related plans and trusts

___________________________________________________________________

Part II. Review Procedures

(Figure 7)
Sample Document Request Letter

Month DD, YYYY

Plan Administrator
XYZ Corporation
234 N. Fairfield Street
Somewhere, Illinois 12345

Re: XYZ Plan

Dear Sir:

As you know, our office will be reviewing XYZ Plan for compliance with Title I of the Employee Retirement Income Security Act (ERISA), which establishes standards governing the operation of employee benefit plans such as XYZ Plan.⁽¹⁾

Submitting relevant documents to our office before the on-site field investigation begins, can help to:

increase the speed of the process,
reduce the administrative burden for plan and corporate officials, and
(in some cases) eliminate the need for an on-site visit entirely.

Please submit to this office by DATE OF LETTER + 10 WORKING DAYS the documents indicated on the checklist below for the XYZ plan. You can also send the documents electronically to: [INVESTIGATOR NAME]@dol.gov.

Thank you for your cooperation. If you have any questions, please contact Investigator/Auditor ____________________ at 200-321-1234.

Sincerely,

Please Submit Copies of the Items Listed Below:

(Figure 8)

Statute Of Limitations Matrix
Issue(s):	Date of Act or Omission	6 years after Fiduciary's act or omission	3 years after EBSA's actual knowledge	6 years after EBSA's discovery where there is fraud or concealment
1. (Exhibit #)
2. (Exhibit #)
3. (Exhibit #)
4. (Exhibit #)

(Figure 9)
Report of Investigation
Sample Format

This document is the property of the Employee Benefits Security Administration.
Its contents are not to be disclosed to unauthorized persons.

File No.

Subject: (Last Name of Complainant) v. Employer

Date

Address of Employer

By Investigator/Auditor

Approved by

EIN/PN

Status: Action

Exhibits

All significant facts presented in the report should be supported with exhibit citations. The following procedures should be used in submitting exhibits.

State the name of the individual who is the subject of an RI, signed statement or sworn administrative testimony and the date of the interview or testimony.
Documents, schedules, etc., should be complete and precisely identified.
Each supporting document should be the final version of the document under which the parties are operating at the time of the alleged breach.
Each supporting document should be a separate exhibit.
Multiple page exhibits should be numbered.
Exhibits should be identified by number.
All copies must be legible.
All plan documents (trust agreement, etc.), relevant minutes of meetings of plan fiduciaries, canceled checks, contracts/agreements, or any other supporting documents pertaining to the transaction(s) at issue, third-party corroborating interviews and/or records, and expert opinions, if any, must be included as exhibits.
Fiduciary liability insurance policy(s) held on the date(s) of the alleged violation(s) and/or at any time subsequent to that date should be included as exhibits. Attempts should be made to determine if the policies are/were in force.
Copies of all annual reports, with attachments, which have been filed by the subject plan subsequent to the transaction or action at issue, must be included as exhibits.

List of documents and workpapers available in RO but not used as exhibits

List documents, schedules, RIs etc., in the RO file that were not included as exhibits. Identify all applicable dates of such documents (e.g., date prepared, date received, etc.).

(Figure 10)
Format For Regional Directors Cover Memorandum To An Action Report

Memorandum For:

____________________
Office of the Solicitor
(Regional Solicitor or PBSD, as appropriate)

From:

____________________
Regional Director
XYZ Regional Office

Subject:

Name and Address of Plan/Related Entity⁽²⁾⁽³⁾
EIN/PN ____________________
And/or ____________________

Introduction: Identify the RO/DO which conducted the investigation, the plan and plan sponsor name(s), and the related entity, if applicable.

Briefly describe the issues and the total apparent losses involved.

Background: Briefly describe the plan(s) and/or related entities involved, including type, nature of benefits/services provided, type of administration, number of participants/plans serviced, and amount of plan assets.

Facts/Violations: Briefly summarize the essential facts demonstrating each violation. For each issue discuss ERISA section(s) violated, and explain the basis for any loss computation.

Statute of Limitations: Discuss the statute of limitations date applicable to each issue identifying the earliest applicable date(s).

Position of the Fiduciaries/Related Parties: Discuss the position of the fiduciaries and/or other parties on each issue, if known. If unknown, state the reason(s) why the RO was unable to obtain this information (e.g., parties' refusal to be interviewed).

Financial Condition of the Fiduciaries/Related Parties: Discuss the financial condition of the fiduciaries and/or related parties, if known. If unknown, state the steps taken by the RO to obtain this information. Also state whether the fiduciaries have fiduciary liability insurance.

Issues Resolved Through Voluntary Compliance: Briefly discuss any issue(s) resolved through voluntary compliance, including any 502(l) implications.

Parallel Investigations: Note any parallel criminal investigations being conducted involving the subject plan and/or its fiduciaries.

Recommendations: Discuss the appropriate remedies, for each violation identified, including but not limited to restitution, rescission of prohibited transactions, removal of fiduciaries, appointment of a receiver, disgorgement, indemnification of the plan against future losses, injunctions against future service to ERISA plans, imposition of 502(i) and 502(l) penalties as applicable, etc.

Footnotes

The Secretary of Labor has the authority to conduct such reviews under Section 504 of ERISA, 29 USC §1134, which states in part: "The Secretary shall have the power, in order to determine whether any person has violated or is about to violate any provision of this title or any regulation or order thereunder ... to make an investigation, and in connection therewith to require the submission of reports, books, and records, and the filing of data in support of any information required to be filed with the Secretary under this title ...."
This memorandum and the Action ROI on page(s)____ , and exhibits ____ contain IRC 6103 information and should be handled accordingly.
This case presents possible reporting deficiencies and/or blackout deficiencies for which ERISA section 502(c)(2) and/or 502(c)(7) civil penalties may be imposed by OCA and which have been referred to OCA. This case presents possible IQPA deficiencies referred to OCA.

(Figure 1)
Model Health Plan Document Request Letter

Certified Mail No.
Return Receipt Requested

xx
Plan Administrator
xx Health Plan
xx
xx

RE: xx Health Plan

Case No.

Dear Plan Administrator:

The Department of Labor has responsibility for the administration and enforcement of Title I of the Employee Retirement Income Security Act of 1974 (ERISA). Title I establishes standards governing the operation of employee benefit plans such as the xx Health Plan (the Plan).

The Plan is scheduled for investigation by this office. Investigative authority is vested in the Secretary of Labor by Section 504 of ERISA, 29 U.S.C. 1134, which states in part:

The Secretary [of Labor] shall have the power, in order to determine whether any person has violated or is about to violate any provision of this title or any regulation or order thereunder...to make an investigation, and in connection therewith to require the submission of reports, books, and records, and the filing of data in support of any information required to be filed with the Secretary under this title ....

Additionally, the Plan will be examined for the purpose of determining whether it is complying with the laws contained in Part 7 of ERISA, including the Health Insurance Portability and Accountability Act of 1996, the Newborns' and Mothers' Health Protection Act, the Women's Health and Cancer Rights Act (WHCRA), the Mental Health Parity and Addiction Equity Act, the Genetic Information Nondiscrimination Act, and the Patient Protection and Affordable Care Act and Health Care and Education Reconciliation Act (collectively, the Affordable Care Act). These laws amended Part 7 of ERISA and provide requirements for group health plans.

We have found in the past that submission of relevant documents to our office prior to the inception of an on-site field investigation can lessen the time subsequently spent with, and the administrative burden placed on, plan and corporate officials and may eliminate the need for an on-site visit entirely. To that end, we ask that you submit to this office, within ten business days of your receipt of this letter, the documentation listed on the enclosed Attachment A. If any items are not applicable, please so indicate and provide an explanation.

Thank you in advance for your cooperation. Should you have any questions, please contact the undersigned at XXX-XXX-XXXX.

Sincerely,

Attachment

(Figure 2)
Copies of Items Identified Below Should Be Submitted as Indicated in the Cover Letter

Footnotes

The Memorandum of Understanding (MOU) between the Departments of Labor, Treasury and Health and Human Services formally establishes an interagency agreement to ensure consistent and uniform administration of regulations, rulings, and interpretations relating to HIPAA and other laws among the Departments.

(Figure 1)
Memorandum Format For Criminal Case Investigative Plan

Subject:

Name of Plan
Address
SSN#
Case No.

To:

Supervisor

Investigative Plan for Subject Case

Results of Indices Search

(Summarize any pertinent information in any other investigative files involving the subject which might have a bearing on the investigation.)
Allegations/Investigative Leads

(Analyze each allegation or investigative lead within the context of the applicable sections of the statute and regulations. Identify each allegation or lead seriatim using the following general outline:
1. Set forth the alleged violation or lead, being as concise as possible without sacrificing the meaning.
  1. Indicate which statutory provision(s) (e.g., 18 U.S.C. section 664) appears to have been violated together with applicable references to any regulations (applicable to ERISA 501 violations only).
  2. List the elements of proof needed to establish that a violation has occurred.)
2. (Repeat as in A for all allegations/leads.)
Planned Investigative Activity

(Indicate what records will be reviewed and/or what interviews will be conducted and what information and documentation will be solicited to fully investigate the allegations and/or investigative leads. The following outline should be used in setting out the planned investigative activity:
1. General
  
  Set forth any investigative activity not related to resolving a specific allegation or lead such as verifying the adequacy of the plan's bond.
2. Allegation/Lead #1
  
  Identify all of the activity needed to fully investigate the allegation/lead.
3. Allegation/Lead #2
  
  (Repeat as in B for all allegations/leads.)
Estimation of the number of workdays required to complete the investigation.

Investigator/Auditor

Approved:

____________________
Supervisor

Date: ____________________

(Figure 2)
Memorandum Format for Updating Criminal Case Investigative Plan

Subject:

Name of Plan
Address
SSN#
Case No.

To:

Supervisor

Update of Investigative Plan

Changes in Original Plan

(Identify any deletions from the original plan together with the reason for the deletions.)
Additional Planned Investigative Activity.

(Fully describe what additional investigation will be conducted.)
Changes in the Estimated Number of Workdays.

(After consultation with the Investigator/ Auditor, the supervisor will note any changes in the estimated number of workdays required to complete the investigation.)

Approved:

____________________
Supervisor

Date: ____________________

(Figure 3)

This document is the property of the Employee Benefits Security Administration.

Its contents are not to be disclosed to unauthorized persons.

File No.

Subject:

(Name of Subject and Address)

Related Entity and Address

Date

By Investigator/Auditor

Approved by

Status: Closed

Predication

Basis for case.
Background

This can be limited to setting forth the facts about the subject, e.g. relationship to plan(s) or related entities, type of plan(s), total participants and assets for most recent year or nature of related entities.
Findings

Cite the facts to show that the allegation(s) was not a violation. In cases where violations are substantiated, state reasons for declination.

(Figure 4)

This document is the property of the Employee Benefits Security Administration.

Its contents are not to be disclosed to unauthorized persons.

File No.

Subject:

(Name of Subject and Address)

Related Entity and Address

Date

By Investigator/Auditor

Approved by

Status: Action

(Figure 5)
Format For Regional Director's Letter To The United States Attorney For Prosecution

USAO
Address

Attention: ____________________ (AUSA Assigned Case)

RE: Subject(s) of Investigation

Dear ____________________

This letter should briefly 1) provide background information on the plan or entities involved or the subject(s); 2) summarize the violations; 3) point out statute of limitations concerns and list earliest date that there could be a bar; 4) discuss any parallel investigations; 5) discuss possible defenses; 6) identify any need for additional investigation; and 7) provide recommendations. In short, it should be a synopsis of the investigation.

Introduction: Briefly present background information regarding the plan(s) and/or related entities involved, the subject(s), and other agency involvement.

Violation(s): Briefly summarize the violations, discuss any statute of limitation concerns and point out the earliest possible date that may bar a violation.

Defenses: Present any defense that may be encountered.

Parallel Investigations: Advise of the existence of a parallel investigation and status.

Recommendations: Include any additional investigation activity which is underway or any that is, or should be, considered.

Sincerely,

Regional Director

cc: File

(Figure 6)
Sample Debarment Letter
Convicted Person

Certified Mail - Return Receipt Requested

Date:

Name
Address

Dear, ____________________

On (date that judgment was entered), you were convicted of ____________________. As a result of this conviction, you are prohibited by Section 411 of the Employee Retirement Income Security Act (29 U.S.C. § 1111) from serving or being permitted to serve in the following positions and capacities.

You are prohibited from serving any employee benefit plan as an administrator, fiduciary, officer, trustee, custodian, counsel, agent, employee or representative in any capacity. You are disqualified from serving in any capacity that involves decision-making authority or custody or control of the monies, funds, assets or property of any employee benefit plan.

You are prohibited from serving as a consultant or adviser to an employee benefit plan. The term "consultant" means any person who, for compensation, advises or represents an employee benefit plan or who provides other assistance to such plan, concerning the establishment or operation of such plan. A consultant or adviser to an employee benefit plan includes, but is not limited to, any entity whose activities are in whole or substantial part devoted to providing goods or services to any employee benefit plan.

Under the provisions of Section 411, you may not serve or be permitted to serve in any of the positions and capacities listed above until thirteen years after the conviction, or if imprisoned, until thirteen years after the end of any such imprisonment which resulted from the conviction, whichever is the later date. This disability applies unless such conviction is finally reversed on appeal; or your citizenship rights, having been revoked as a result of such conviction, have been fully restored; or you are granted an exemption from disqualification. The exemption may be granted by either the sentencing federal judge, in the case of a disqualifying federal offense, or the United States district court for the district in which a state or local disqualifying offense was committed.

The period of disability may be reduced to a shorter period by the court in which you are convicted and sentenced if you make application to that court for such relief. However, the period of disability may not be reduced by the court to a period which extends to less than three years after the conviction or after the end of any imprisonment resulting from the conviction, whichever is the later date.

This letter is to advise you that any intentional violation of the provisions of Section 411 is a felony, punishable by a fine or imprisonment for not more than five years, or both.

Sincerely,

Regional Director

cc: File

(Figure 7)
Sample Debarment Letter
Board Of Trustees Sponsors Service Providers

Certified Mail - Return Receipt Requested

Date:

Name
Address

Dear, ____________________

On (date that judgment was entered), ____________________ was convicted of ____________________ in violation of _____________. As a result of this conviction, ____________________ is prohibited by Section 411 of the Employee Retirement Income Security Act (29 U.S.C. ' 1111) from serving or being permitted to serve in the following positions and capacities.

____________________ is prohibited from serving as an administrator, fiduciary, officer, trustee, custodian, counsel, agent, employee or representative in any capacity of any employee benefit plan.

____________________ is also disqualified from serving in any capacity that involves decision-making authority or custody or control of the moneys, funds, assets or property of any employee benefit plan.

____________________ is prohibited from serving as a consultant or adviser to an employee benefit plan. The term "consultant" means any person who, for compensation, advises or represents an employee benefit plan or who provides other assistance to such plan, concerning the establishment or operation of such plan. A consultant or adviser to an employee benefit plan includes, but is not limited to, any entity whose activities are in whole or substantial part devoted to providing goods or services to any employee benefit plan.

Under the provisions of Section 411, ____________________ may not serve or be permitted to serve in any of the positions and capacities listed above until thirteen years after conviction, or if imprisoned, until thirteen years after the end of any such imprisonment which results from the conviction, whichever is the later date. This disability applies unless such conviction is finally reversed on appeal; or ____________________'s citizenship rights, having been revoked as a result of such conviction, have been fully restored; or the convicted person is granted an exemption from disqualification. The exemption may be granted by either the sentencing federal judge, in the case of a disqualifying federal offense, or the United States district court for the district in which a state or local disqualifying offense was committed.

The period of disability may be reduced to a shorter period by the court in which _____________ was convicted and sentenced if __________________ makes application to that court for such relief. However, the period of disability may not be reduced by the court to a period which extends to less than three years after the conviction or after the end of any imprisonment resulting from the conviction, whichever is the later date.

Section 411 imposes this disability on ____________________ and further provides that no person shall knowingly hire, retain, employ, or otherwise place any other person to serve in any capacity in violation of its terms.

This letter is to advise you that any intentional violation of the provisions of Section 411 is a felony, punishable by a fine or imprisonment for not more than five years, or both.

Sincerely,

Regional Director

cc: File

Footnotes

When the issues relate to a reduction of a bar or an exemption pursuant to section 411(a), the investigation should be conducted as a Program 47. Refer to Prohibited Persons section of this manual, paragraph 5.

Purpose. This section provides guidance for using case development techniques and handling limited review investigations relating to employee benefit plans.
Case Development.

Case Development is the process of combining intelligence, planning, and operations in order to analyze, identify, develop, validate, assess, and prioritize cases for investigation. EBSA’s case development seeks to direct limited resources toward those plans and service providers with the highest potential for abuse in a matter consistent with agency goals, objectives, and priorities.
1. Criteria. Enforcement strategies, annual operating plans, industry trends, and national policy statements will provide direction for case development efforts to initiate the investigation of:
  1. Financial institutions
  2. Insurance carriers
  3. Service providers
  4. Specific sizes and types of plans
  5. Types of benefits
  6. Types of investments
  7. Individuals
  8. Other specific matters
  Additionally, regionally initiated case development should reflect plan demographic factors, like local economic conditions, geographical coverage, and specialized industries or plan types and sizes.
2. Sources. Sources for case development potential investigations may include:
  1. Computer-generated compilations of selected employee benefit plans or service providers derived from reports filed with EBSA.
  2. Information derived from detailed review and analysis of annual reports, supporting financial statements, schedules, exemption application files, ERISA section 502 complaints, and other internal EBSA sources.
  3. Information concerning employee benefit plans or service providers referred by other governmental agencies such as the IRS, the SEC, other financial regulatory agencies, HHS, and the state insurance agencies.
  4. Information concerning employee benefit plans or service providers obtained from non-governmental sources such as newspapers, private litigation, industry journals and magazines, websites, social media, public and commercial databases, or leads from knowledgeable parties.
  5. Information and leads of potential systemic violations from participants, fiduciaries, informants, or other sources in the employee benefit plan community. These leads are exclusive of other than allegations of acts against a participant or beneficiary for exercising any right to which he/she is entitled under the provisions of an employee benefit plan, or interfering with the attainment of any right to which the participant may become entitled, which should be handled as described in Participant Rights.
  6. Compilations of selected employee benefit plans or service providers derived by using combinations of the sources listed in (a) through (e) above.
3. Records for Case Development. For all activities conducted during case development, such as telephone calls, internet/database searches, etc., the RO must maintain a record in EBSA’s database (Zero File) . The record for each entity shall include:
  1. Date of contact/search;
  2. Name of party contacted/searched;
  3. Name of database searched;
  4. Summary of what occurred;
  5. Any action taken by the RO (i.e., no action taken, case opened, etc.); and
  6. Sufficient back-up documentation (e.g., annual reports, financial statements, correspondence) to allow for a subsequent statute of limitations analysis.
4. Disposition. If case development efforts indicate that a violation may exist, then the RO should open a full-scope investigation.
  
  If, however, case development leaves open a threshold question or issue that must be resolved before determining whether a violation exists, then the RO may open a limited review investigation (Program 77).
  
  At the case development stage, the RO makes no commitment under ERISA section 504 to conduct a limited review and/or full-scope investigation.

Limited Review Investigations

Limited Review Investigations are expedited inquiries into one or more specific issues, features, or aspects of a plan, service provider operations, and/or an individual in order to determine whether a potential violation exists and RO determines whether to further investigate or close the matter.

Scope. A limited review investigation is appropriate when an initial lead or complaint is unclear or not adequately supported, or when case development presents an issue that needs further explanation. RO should only open limited review investigations to determine whether a particular activity, transaction, or specific potential violation occurred. ROs are not required to examine every aspect of plan or service provider operations, only those matters that formed the basis for the limited review opening.
Relationship of Case Development to Limited Review Investigation. If limited information is necessary to determine the likelihood of whether or not a violation exists, the RO should open a limited review investigation to determine that information exists.
Opening Limited Review Investigations. The opening narrative should briefly describe the reason for the limited review opening. The summary should contain:
1. A description of the pertinent facts that form the basis for opening an investigation, including an explanation of the issue that needs clarification; and
2. The results of the case opening vetting procedures, including the search of global indices.
Investigator/Auditors should maintain any materials reviewed before opening the case in the case file.
Information Requests & Fact-Gathering. Once RO opens a limited review investigation, activities to obtain information include background searches such as CLEAR and other available public records and:
1. Initial document requests (or subpoenas) to get information relating to the specific issue, feature or aspect; and
2. Interviews to get additional information relating to the specific issue, feature or aspect.
Information obtained by document request and interviews will be used to determine whether a full-scope investigation is merited. See Figure 1 for an example of a document request letter/limited review open letter.

Limited Review Investigation Dispositions. Limited review investigations should have no results. Limited review investigations must be either closed or converted using the following dispositions:

Investigation Dispositions
Disposition	Actions	More Info
No Violation(s) Found	Prepare a closing ROI describing the basis for the review, the issues and documents reviewed, the individuals interviewed, and why EBSA found no violations exist and/or the reason for further investigation. Inform appropriate plan or service provider officials in a letter that includes the SBREFA⁽¹⁾ notice, if applicable.	Form 203D Form 203 E Form 203F Form 203G Figure 2
Potential Violations Found	Notify your supervisor. The RO will consider converting the investigation to a retirement, health, or welfare investigation, in accordance with case management requirements.	Refer to sections on Fiduciary/Health and/or Welfare Investigations
Potential Criminal Violations Found	Inform your supervisor as soon as possible after uncovering evidence of possible criminal violation(s). The civil case will proceed. The RD will decide whether and who will conduct a criminal investigation.	Refer to section on Criminal Investigations of the Manual
Potential Violations of Participant Rights	If the review uncovers possible section 510 violations involving acts against a participant or beneficiary for exercising any right to which he/she is entitled under the provisions of an employee benefit plan, or interfering with the attainment of any right to which the participant may become entitled, convert the case to a Participant Rights investigation.	ERISA Section 510 and section Participant Rights of the Manual
Prohibited Persons	If the review indicates that a person barred from serving as an employee benefit plan fiduciary or service provider following a criminal conviction is acting in such a capacity, convert the case to a Prohibited Persons investigation.	ERISA section 411 and section Prohibited Persons of the Manual

Statute Control Date Analysis. Investigators/Auditors must review all received, requested and related predicate issue documents to complete a statute analysis for all potential issues and document it in EBSA’s database.
General Investigative Considerations under Limited Review Investigations. Generally, the Department will not inform plan officials or others of the basis for its investigation except to state that the purpose of the limited review is to determine whether a violation of Title I of ERISA occurred or is about to occur. The RO should follow normal operating requirements, as reflected elsewhere in the Manual, for conducting and documenting interviews, receiving and maintaining records, and similar functions. However, the scope of records reviewed, interviews conducted, and third-party verifications made may be less under limited review investigations than under full-scope investigations.

Figure 1
P-77 Opening Letter

Month DD, YYYY

Plan Administrator
XYZ Corporation
234 N. Fairfield Street
Somewhere, Illinois 12345

Re: XYZ Plan

Dear (Plan Administrator/Fiduciary):

We are conducting a limited investigation of (XYZ plan) to determine whether it complies with Title I of the Employee Retirement Income Security Act (ERISA). [If applicable: This is part of a broader inquiry of selected private employee benefit plans.] Please send copies of the materials listed below to: [EBSA field office address] within the next 15 days.

The requested items are: [list as appropriate]

If you have any questions, please call 200-321 1234 or write to the above address.

Thank you in advance for your cooperation.

Sincerely,

[Investigator]
Regional Office

Enclosure (SBREFA Pamphlet)

Figure 2
P-77 Closing Letter – No Violations Detected

Month DD, YYYY

Plan Administrator
XYZ Corporation
234 N. Fairfield Street
Somewhere, Illinois 12345

Re: XYZ Plan
Case Number

Dear (Plan Administrator/Fiduciary):

We concluded our limited investigation into XXX under the Employee Retirement Income Security Act (ERISA). Based on the information we’ve reviewed to date, we determined that XXX. We plan no further action at this time.

Please note that resolving this matter is limited to the specific issues reviewed in this investigation of the Plan. Our findings or absence of findings, including the absence of findings regarding any specific provision of the Plan, shall not bind the Department in:

reviewing or investigating any other employee benefit plan or service provider, or
any subsequent Plan review regarding issues not raised by this investigation.

Our decision is binding on the Department only. It does not prevent another individual or governmental agency from taking action.

Thank you for your cooperation.

Sincerely,

Regional Director

Enclosure: SBREFA Notice⁽²⁾

Footnotes

SBREFA Notice. In accordance with the provisions of the Small Business Regulatory Enforcement Fairness Act of 1996 (SBREFA), the Small Business Administration has established a National Small Business and Agriculture Regulatory Ombudsman and 10 Regional Small Business Regulatory Fairness Boards to receive comments from small businesses about federal agency enforcement actions. Notice of the right to comment to the SBREFA Ombudsman will be provided by copy of the EBSA Customer Service Standards pamphlet to all plan sponsors, plans, or plan service providers with less than 100 participants or employees during the course of ERISA Title I civil investigations. The right to file a comment with the Ombudsman does not affect EBSA authority to enforce or otherwise seek compliance with ERISA. EBSA RDs have discretion regarding the timing of the delivery of the pamphlet/notice on a case-by-case basis. The case file must reflect appropriate documentation of the SBREFA notice.
When the subject of the investigation is a plan, or other business entity, with fewer than 100 participants or employees and when the notice was not previously provided.

Purpose. To encourage collaboration between ROs⁽¹⁾ and provide guidance on conducting these joint investigations of employee benefit plans and service providers. Increasing collaboration among ROs can lead to:
1. More efficient use of investigative talent and expertise;
2. Increased consistency in applying enforcement policies;
3. A better understanding of issues and trends affecting the regulated community on a national basis
Case Characteristics. Cross-regional civil or criminal investigations are appropriate for one or more of the following:
1. Large plans (i.e. plan asset or participant size);
2. Service providers to multiple plan clients;
3. Complex or systemic issues;
4. Resource-intensive;
5. Time-sensitive
Ways to Collaborate. ROs can collaborate on cross-regional investigations by:
1. Introducing investigations for consideration;
2. Opening an Office 99, if appropriate;
3. Leading an investigation involving another RO or OE staff;
4. Participating in an investigation by providing investigative expertise or conducting a parallel investigation⁽²⁾
Investigative Assistance/Auxiliary Investigations⁽³⁾. When there is only the need for limited investigative activity on a case outside the geographic jurisdiction of the primary RO, the primary RO may:
1. Request the RO having jurisdiction over this area (auxiliary office) to perform the work;
2. Notify the auxiliary RO prior to conducting the work
Appropriate examples of auxiliary investigations include:
1. Issuance of an in-person subpoena requiring immediate production
2. Conducting routine interviews
3. Participating in search and seizures

Investigator/Auditors should charge time expended in auxiliary investigations to the primary RO’s case.

Footnotes

Cross Regional investigations can also include the OE staff.
The “lead region” designation is normally to be given to the RO that developed the investigation to the point of receiving cross-jurisdictional consideration. However, other factors to consider include expertise needed to complete the investigation in an efficient and effective manner.
Auxiliary investigations do not meet the criteria for cross-regional investigations.

Enforcement Manual

Preface

Background

Process

Implementation

Record Maintenance

Headquarters and Staffing

Responsibility

Authority and Coordination

(Figure 1) Secretary's Order 01-2003

(Figure 2) Memorandum Of Understanding

(Figure 3) United States Department Of Justice United States Department Of Labor Memorandum Of Understanding

Footnotes

(Figure 1) Memorandum Of Understanding Internal Revenue Service/Department of Labor Coordination Agreement

(Figure 1a) IRS/DOL Coordination Agreement Index

List of Appendices

(Figure 1b) Addendum to IRS/DOL Coordination Agreement

IRS – EP & DOL - EBSA Local Contacts

(Figure 2) Reorganization Plan No. 4 Of 1978

Employee Retirement Income Security Act Transfers

Section 101. Transfer to the Secretary of the Treasury

Section 102. Transfers to the Secretary of Labor

Section 103. Coordination Concerning Certain Fiduciary Actions

Section 104. Enforcement by the Secretary of Labor

Section 105. Enforcement by the Secretary of the Treasury

Section 106. Coordination for Section 101 Transfers

Section 107. Evaluation

Section 108. Incidental Transfers

Section 109. Effective Date

(Figure 3) Memorandum of Understanding Among the U.S. Department of the Treasury, the U.S. Department of Labor, and the U.S. Department of Health and Human Services

Article I

Introduction and Purpose

Article II

Authority

Article III

Definitions

Article IV

Background

Article V

Scope of Work

Article VI

Coordinated Enforcement Strategy

Article VII

Confidentiality of Information

Article VIII

Duration of Agreement

Article IX

Officials Responsible for MOU

Footnotes

(Figure 1) Memorandum Of Understanding Between The Office Of Inspector General And LMSA

(Figure 1) Interagency Agreement

(Figure 2) The Federal Financial Institutions Regulator Agencies And Their Supervised Institutions

The Board Of Governors Of The Federal Reserve System (FRB)

The Federal Deposit Insurance Corporation (FDIC)

The Office Of Thrift Supervision (OTS)

The National Credit Union Administration (NCUA)

The Office Of The Comptroller Of The Currency (OCC)

(Figure 3) Memorandum Of Understanding Concerning Cooperation Between The U.S. Securities and Exchange Commission and The U.S. Department of Labor

(Figure 4) SEC Access Request Letter

Footnotes

(Figure 1) No Action Letter

Covered Transactions in the Voluntary Fiduciary Correction Program

(Figure 2) VFCP Checksheet

(Figure 3) Penalty of Perjury Statement

Footnotes

Administrative Procedures

(Figure 1) 18 U.S.C. 1905. Disclosure of Confidential Information Generally

(Figure 2) Notice of Transfer of Financial Records

(Figure 3) Unauthorized Disclosure of Information

Civil Damages for Unauthorized Inspection or Disclosure of Returns and Return Information

(Figure 4)

Attachment to Request for Federal Tax Returns

Attachment to Request for IRS Reports, Correspondences & Documents

Footnotes

Footnotes

(Figure 1) Outline for Civil Investigation Report of Interview (See EBSA Form 202)

(Figure 2) Outline for Criminal Investigation Report of Interview Witness or Non-Custodial Subject (See EBSA Form 202A)

(Figure 3) Advisement of Rights

Waiver of Rights

Certification

(Figure 1)
Secretary's Order 01-2003

(Figure 2)
Memorandum Of Understanding

(Figure 3)
United States Department Of Justice
United States Department Of Labor
Memorandum Of Understanding

(Figure 1)
Memorandum Of Understanding
Internal Revenue Service/Department of Labor Coordination Agreement

(Figure 1a)
IRS/DOL Coordination Agreement
Index

(Figure 1b)
Addendum to IRS/DOL Coordination Agreement

(Figure 2)
Reorganization Plan No. 4 Of 1978

(Figure 3)
Memorandum of Understanding Among the U.S. Department of the Treasury,
the U.S. Department of Labor,
and the U.S. Department of Health and Human Services

(Figure 1)
Memorandum Of Understanding
Between The Office Of Inspector General And LMSA

(Figure 1)
Interagency Agreement

(Figure 2)
The Federal Financial Institutions Regulator Agencies And Their Supervised Institutions

(Figure 3)
Memorandum Of Understanding Concerning Cooperation Between
The U.S. Securities and Exchange Commission and The U.S. Department of Labor

(Figure 4)
SEC Access Request Letter

(Figure 1)
No Action Letter

(Figure 2)
VFCP Checksheet

(Figure 3)
Penalty of Perjury Statement

(Figure 1)
18 U.S.C. 1905. Disclosure of Confidential Information Generally

(Figure 2)
Notice of Transfer of Financial Records

(Figure 3)
Unauthorized Disclosure of Information

(Figure 1)
Outline for Civil Investigation Report of Interview
(See EBSA Form 202)

(Figure 2)
Outline for Criminal Investigation Report of Interview
Witness or Non-Custodial Subject
(See EBSA Form 202A)

(Figure 3)
Advisement of Rights

(Figure 4)
Outline for Criminal Report of Interview
Custodial Subject
(See EBSA Form 202B)

(Figure 5)
Civil Investigation Report of Interview with Signed Statement

(Figure 6)
Format for Criminal Investigation Report of Interview Witness or Non-Custodial Subject

(Figure 7)
Format for Criminal Investigation Report of Interview
Custodial Subject with Signed Statement

(Figure 8)
Format and Guide For A Signed Statement

(Figure 1)
Listing of Some Categories of Workpapers

(Figure 1)
Model Letter Accompanying Subpoena
Where Only Production of Records Is Required

(Figure 2)
Model Letter Accompanying Subpoena to Testify Only

(Figure 3)
Model Letter Accompanying Subpoena for Appearance to Produce Records And Testify

(Figure 4)
Model Letter Accompanying Subpoena Where Attorney Has Agreed To Accept Service

(Figure 5)
Model Accommodation Letter Accompanying Subpoena

(Figure 6)
United States of America
Department of Labor
Employee Benefits Security Administration

(Figure 7)
Format for Taking Sworn Testimony

(Figure 9)
United States Department of Labor
Employee Benefits Security Administration
Address Certificate of Compliance with the Right to Financial Privacy Act

(Figure 10)
United States Department of Labor
Employee Benefits Security Administration
Address Customer Consent and Authorization for Access to Financial Records

(Figure 11b)
Instructions for Completing and Filing the Motion and Sworn Statement

(Figure 11c)
Customer's Motion to Challenge Government's Access To Financial Records

(Figure 11c)
Customer's Motion to Challenge Government's Access To Financial Records

(Figure 11e)
Customer's Sworn Statement For Filing A Challenge

(Figure 12)
Model Accommodation Letter
Accompanying Subpoena in a Criminal Case

(Figure 13)
United States Department of Labor
Employee Benefits Security Administration
Model Letter Accompanying Criminal Subpoena Duces Tecum

(Figure 14)
Authentication Form Pursuant to FRE

Certification Under Federal Rules of Evidence
803(6), 902(11), and 902(13)

(Figure 1)
Sample VC Notice Letter

(Figure 3)
Settlement Agreement

(Figure 4)
Sample PTE 94-71 Notice to Affected Parties

(Figure 5)
Settlement Agreement No. 1

(Figure 6)
Settlement Agreement No. 2

(Figure 7)
Sample Pattern Closing Letter
No ERISA Violations Detected

(Figure 8)
Sample Closing Letter
No Action Warranted
This closing letter should not be used in a 502(l) or 502(i) situation

(Figure 9)
Sample Closing Letter Corrective Action Taken

(Figure 10)
Sample Closing Letter
No VC Letter/Referral to IRS
This closing letter should not be used in a 502(l) or 502(i) situation

(Figure 11)
Sample Closing Letter

(Figure 1)
ERISA Section 502(i) Assessment Letter

(Figure 2)
Sample 502(1) Civil Penalty Assessment Letter
Settlement Agreement

(Figure 3)
Procedures under ERISA Section 502(l)

(Figure 4)
Sample 502(1) Civil Penalty Assessment Letter
Consent Judgment

(Figure 5)
Blackout Notice