Facts About EBSA Audits

An Employee Benefits Security Administration (EBSA) audit, even if no issues are found, is time-consuming and stressful for both the company and the plan trustees. If issues are found they can be costly, and more importantly, plan trustees can be held personally liable. Independent Fiduciaries like the ERISA Advisory Group can greatly limit your chances of being audited, and if you are audited reduce the stress and improve the outcome. As former Department of Labor Investigators, we understand the expectations of the government. Since 1995 we have successfully helped hundreds of companies and organizations across a broad range of business sectors.

Following are answers to common questions about EBSA/ERISA

1. What are your chances of being audited?

The EBSA closed 1,707 Civil Investigations and 307 Criminal Investigations in 2017 and, estimating conservatively, covertly examined at least 20 times that amount. The average penalty per audit was $245,000. Considering the sheer number of plans in the U.S. you could gamble that EBSA will not audit your plan but we believe the risk/award equation strongly favors ensuring your plan is in compliance by hiring a professional fiduciary service like EAG.

2. Five things you should know about a Qualified Plan Audit.

  1. They come with little warning
  2. The average penalty in 2017 was $245,000
  3. They start with three years of records and can review up to seven years.
  4. They require constant access to a plan representative during the course of their audit and audits can continue for years
  5. Their findings can be made public.

We know these things at EAG because we used to do audits for the Department of Labor

3. What’s the best way to avoid an audit?

Simply, be in complete compliance with all government forms and timely with all deadlines. The trouble is that’s often easier said than done because of the complexities and ever-changing nature of ERISA.

It’s why we recommend an Independent Fiduciary specializing in ERISA to review your process and determine if there is anything that needs correcting. A consultancy like ERISA Advisory Group are not only experts on ERISA, we are also in regular and long-term dialogue with the Employee Benefits Security Administration. We know who to talk to and they take our calls because they know us.

If you want to be confident that you are fully compliant and avoid possible costly penalties please contact us today.


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