What small plans have to fear

They always say that the concern over small retirement plans is overblown, that they never get sued. While much litigation from plan participants have avoided smaller plans (ERISA litigators like big asset plans), small plans are still at risk from Department of Labor (DOL) sanction.

In 2010, the DOL audited more than 3,100 plans and found that:

  • More than 73% of the plans were required to restore losses to the plan or take another type of corrective action to correct plan deficiencies.
  • 96 individuals (e.g., plan officials, corporate officers and service providers) were indicted for offenses related to their plans.
  • From the audits, the majority of violations generally come from oversight, errors and omissions by plan sponsors and not through actual theft.

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