The Employee Benefits Security Administration (EBSA) has been increasing its audits of compliance with the Employee Retirement Income Security Act (ERISA) since the 2008 financial meltdown, observers report. To justify its increased budget and staffing for EBSA, the Department of Labor (DOL) is now targeting 3,000 ERISA audits a year.
The audits generally focus on two areas. One is the issuance of Summary Plan Descriptions (SPDs) for retirement vehicles such as 401(k) plans, and the other is not really an ERISA concern but related to the Health Insurance Portability and Accountability Act (HIPAA) and the communication of special enrollment rights into health benefit plans.
Observers say that almost 70 percent of firms audited are found not to be in compliance and are fined accordingly.