c. Employee Benefit Security Administration (EBSA) initiatives: The EBSA, a division of the DOL, may target industries or issues identified as having a higher likelihood of non-compliance. d. Information from other sources: The DOL may receive information from external sources, such as media reports, whistleblowers or other regulatory agencies, that raise concerns about a specific retirement plan. e. Random selection: Like the IRS, the DOL may conduct random audits as part of its regular enforcement activities. It is important for plan sponsors and fiduciaries to be aware of their responsibilities and ensure compliance with applicable laws and regulations to minimize the likelihood of a DOL audit. Regularly reviewing your plan’s investment options/fees, updating plan documentation, maintaining adequate records, fee benchmarking and staying informed about regulatory changes can help mitigate compliance risks. Just like violations of a BSA audit or Flood Determination audit can lead to fines and penalties, so can breaches of fiduciary duties. Some of the penalties and consequences could include: 1. The EBSA has the authority to investigate fiduciary breaches and take enforcement actions. The DOL may pursue legal action to recover losses on behalf of the plan and participants, impose civil penalties and require corrective actions to be taken. 2. Violations may result in the fiduciary being required to restore any losses incurred by the plan as a result of the breach. This can include returning misappropriated assets, compensating participants for losses and paying for any associated damages. 3. In cases where prohibited transactions occur, such as self-dealing or improper use of plan assets, excise taxes can be significant and may include additional penalties. 4. Plan participants and beneficiaries can bring lawsuits against fiduciaries for breaching their duties. If a lawsuit is successful, fiduciaries may be required to pay damages to the participants or beneficiaries harmed by the breach. 5. Fiduciaries can be held personally liable. This means that their personal assets may be at risk to satisfy any legal judgments or settlements resulting from the violations. Civil monetary penalties can be imposed by various regulatory agencies including the DOL and the IRS. 6. Criminal penalties can be imposed resulting from intentional and willful violations of ERISA. This can include imprisonment. It is important to note that criminal penalties are generally reserved for cases involving intentional misconduct, such as embezzlement, fraud or other deliberate and fraudulent acts. If you suspect violations of ERISA, it is advisable to report the matter to the appropriate authorities, such as the DOL or the DOJ. Andy is a long time Montana resident living in Bigfork, Mt. He can be reached at (480) 688-1011 or andy@benefitandfinancial.com. Representatives offer products and services using the following business names: Bene t & Financial Strategies, LLC — insurance and nancial services | Ameritas Investment Company, LLC (AIC), Member FINRA/SIPC — securities and investments | Ameritas Advisory Services (AAS) — investment advisory services. AIC and AAS are not affiliated with Bene t & Financial Strategies, LLC. Community Banker 17
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