The Department of Labor just announced that its Employee Benefits Security Administration (EBSA) is giving its opinion letter program a much-needed facelift. For those of us who\u2019ve been around the retirement plan block a few times, this is welcome news\u2014because clarity is hard to come by when navigating the bureaucratic jungle of ERISA and federal regulations.<\/p>\n
On June 2, the DOL rolled out changes across multiple agencies as part of its push to better support compliance and make enforcement a little less like reading hieroglyphics without a Rosetta Stone. As part of this initiative, they\u2019ve launched a new web page that makes it easier to browse past letters and request new ones. In a world where the wrong interpretation can land you in hot water with a class action lawsuit or a DOL investigation, a clear and official opinion is worth its weight in gold.<\/p>\n
As Deputy Secretary of Labor Keith Sonderling put it, \u201cOpinion letters are an important tool in ensuring workers and businesses alike have access to clear, practical guidance.\u201d I don\u2019t often agree with DOL press releases, but he\u2019s not wrong.<\/p>\n
What\u2019s New?<\/p>\n
The DOL\u2019s modernization effort spans several agencies, not just EBSA. The Wage and Hour Division, VETS, OSHA, and MSHA are all in on the action. But for those of us in the ERISA world, the EBSA\u2019s part of the upgrade is what matters most.<\/p>\n
EBSA issues two kinds of letters:<\/p>\n
\u00b7 Advisory Opinions \u2013 These apply the law to specific facts. Think Advisory Opinion 2023-01A, where EBSA weighed in on Citigroup\u2019s commitment to cover investment management fees in certain plans.<\/p>\n
\u00b7 Information Letters \u2013 These don\u2019t apply the law to a particular situation, but clarify how the DOL interprets well-established legal principles. Example: the SECURE Act and bonding requirements for PEPs in Information Letter 2022-09-07.<\/p>\n
The DOL is encouraging the public to submit requests, and if you\u2019re a plan sponsor, attorney, TPA, or advisor dealing with a gray area, this is a tool you should have in your compliance toolbox.<\/p>\n
How to Request an Opinion Letter (and Not Screw It Up)<\/p>\n
Anyone can submit a request \u2014 employers, employees, consultants, even lawyers who are brave enough to admit they don\u2019t know everything. But you\u2019ll need to come prepared:<\/p>\n
\u00b7 Include the laws or regulations at issue.<\/p>\n
\u00b7 Lay out the facts \u2014 accurately and completely.<\/p>\n
\u00b7 Confirm that the issue isn\u2019t currently being litigated or investigated.<\/p>\n
\u00b7 And yes, give them a phone number (welcome to 1996).<\/p>\n
But here\u2019s the fine print: don\u2019t include confidential or sensitive info. The DOL may post their response publicly. So unless you want your plan\u2019s dirty laundry hanging on a .gov site, keep it clean.<\/p>\n
Also, don\u2019t bother using this process to try and weasel out of a problem you\u2019re already knee-deep in. If there\u2019s a current investigation or lawsuit, the DOL won\u2019t touch your request.<\/p>\n
Why It Matters<\/p>\n
For years, I\u2019ve said that one of the biggest risks in the retirement plan space isn\u2019t bad actors \u2014 it\u2019s confused actors. The DOL\u2019s guidance has been inconsistent, hard to find, and often outdated. This upgrade to the opinion letter program is a step in the right direction.<\/p>\n
But let\u2019s be clear: this is still government. \u201cModernization\u201d is relative. The website might be easier to navigate, and the letters more accessible, but this won\u2019t magically make ERISA any less complex or the DOL any faster to respond.<\/p>\n
Still, it\u2019s a useful move. In an age of excessive fee lawsuits, plan design scrutiny, and complex regulatory changes (looking at you, SECURE 2.0), having a place to ask the DOL, \u201cCan I do this?\u201d and maybe get a straight answer is a win.<\/p>\n
At the end of the day, a well-timed opinion letter can be the difference between a prudent fiduciary and a defendant in federal court.<\/p>\n
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