Preface

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The Employee Benefits Security Administration published this manual solely for the use of its employees. It is not meant to limit EBSA’s discretion regarding its responsibilities set by ERISA.

This manual is not intended to:

  • be an interpretation of law or regulation,
  • address agency policy on issues or potential violations,
  • serve as guidance for persons outside the Department of Labor,
  • give any person, including the subject of an EBSA investigation or enforcement action, a right to rely on any policy or procedure contained in the manual, or
  • create any other substantive or procedural rights.

Authority and Coordination

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  1. Statutory Authority. The investigative authority given to the Secretary of Labor (Secretary) under ERISA is in Section 504 and Section 506 (as amended by the Comprehensive Crime Control Act of 1984) and relates to all investigations undertaken pursuant to Title I of the Act.

  2. Interpretation of Section 504. Section 504(a) gives investigative authority to the Secretary to determine whether any person has violated Title I of ERISA or any related regulations or orders. This authority extends to investigations of actual or potential violations of Title I.

  3. Interpretation of Section 506. Section 506(b), as amended by the Comprehensive Crime Control Act of 1984, gives the Secretary the authority to investigate criminal violations under Title 18 of the USC as they relate to employee benefit plans. Specifically, the Secretary has jurisdiction to investigate potential criminal violations of Sections 664, 1027, 1954, 669, 1035, 1347, and 1518 of Title 18. However, the Secretary continues to observe certain limitations on the exercise of this authority under an agreement with the DOJ. See paragraph 6 below.

  4. Making Information Available to Affected Person. Section 504(a) provides that the Secretary may make information available to any person actually affected by any matter that is the subject of an investigation. Generally, such persons will include plan fiduciaries, participants, beneficiaries, or their representatives. In appropriate cases, others may also be included.

    Section 504(a) does not permit disclosure of information specifically prohibited by another statute, such as grand jury information subject to Rule 6(e) of the Federal Rules of Criminal Procedure or tax information subject to Section 6103 of the Internal Revenue Code. (See the Enforcement Manual section on the Release of Information, for discussion of restrictions on disclosure).

  5. Delegation of Authority to Assistant Secretary for Employee Benefits Security Administration. Secretary's Order 1-87 dated April 13, 1987,(1) and Secretary's Order 1-2003(4), dated February 3, 2003, delegated authority to the agency's Assistant Secretary to carry out programs and activities to be performed by the Secretary under the following laws (Figure 1):

    1. ERISA, as amended, except for subtitle C of Title III, and Title IV;(2)

    2. The Welfare and Pension Plans Disclosure Act of 1958, as amended;(3) and

    3. The Federal Employees' Retirement System Act of 1986.

  6. Investigation of Criminal Matters Related to ERISA.

    1. On February 9, 1975, the Department and the DOJ executed a Memorandum of Understanding (MOU) that provided for a specific case-by-case delegation from the DOJ regarding investigations of criminal matters relating to employee benefit plans (Figure 2). With the passage of the Comprehensive Crime Control Act of 1984, the Department has express statutory authority to investigate criminal matters relating to employee benefit plans.

      The Department is no longer required to obtain delegation on a case-by-case basis; however, EBSA Investigators/Auditors will contact the appropriate United States Attorney's Office (USAO) as early as possible in the investigation to determine interest by the USAO. (See the Enforcement Manual section on the Criminal Investigations Program for EBSA policy concerning criminal investigations involving employee benefit plans.)

    2. The Secretary will investigate matters that may form the basis for possible criminal action under Section 501 of ERISA, codified at 29 USC 1131 based on either the receipt of a complaint of an alleged violation or on his/her own volition. These matters include reporting and disclosure provisions under part 1 of Title I and any regulations issued thereunder.

  7. Parallel Civil and Criminal Investigations. Occasionally, EBSA personnel may request to terminate or postpone a civil ERISA investigation pending completion of another government agency's investigation of a parallel criminal matter. Procedures for handling such requests are set forth in the Enforcement Manual section on the Criminal Investigations Program.

  8. Section 411(a) Exemption Proceedings. Pursuant to the MOU between the Department and the DOJ, the investigation and presentation of issues concerning the appropriateness of a grant of a Certificate of Exemption under Section 411(a) to a person by a federal court will be the responsibility of the Department, including appearances before the court. (See the Enforcement Manual section on Prohibited Persons.)

  9. Investigations under Title IV of ERISA. The statute does not give the Secretary authority to investigate under Title IV of the Act. Under Section 4003(d), the Pension Benefit Guaranty Corporation (PBGC) may make agreements with the Secretary to help carry out the provisions of Title IV.

  10. Health Oversight Authority. The HIPAA (Health Insurance Portability and Accountability Act of 1996) privacy regulations, collectively known as the “Privacy Rule,” set forth several “permitted uses”, “disclosures” or “standards” which allow covered entities to disclose Protected Health Information without patient authorization. The Privacy Rule's “health oversight” standard enables EBSA to obtain Protected Health Information from plans, their service providers, and physicians as is necessary to ensure compliance with ERISA. EBSA is a health oversight agency.

  11. Litigation Responsibility for Civil Cases. An MOU entered into on February 11, 1975, between the DOJ and the Department established litigation responsibility under ERISA (Figure 3). Pursuant to the agreement, the Office of the Solicitor of Labor has primary litigation responsibility for civil cases, arising in the district courts and courts of appeals, under ERISA. There are certain exceptions that are set out in the MOU.

  12. Prosecution of Criminal Matters. The MOU between the Department and the DOJ provides that DOJ will prosecute (Figure 2) all cases involving ERISA criminal provisions.

  13. Agreements with Other Government Agencies. EBSA, in addition to having agreements with the DOJ, has agreements with various government agencies, including, but not limited to the following:

    1. Internal Revenue Service (see Enforcement Manual section on Relationship with IRS);

    2. Departments of Treasury and Health and Human Services (see Enforcement Manual section on Relationship with IRS);

    3. Office of the Inspector General, Office of Labor Racketeering (see Enforcement Manual section on Relationship with OIG/Office of Labor Racketeering);

    4. Federal Financial Institution Regulatory Agencies (Federal Reserve System, Federal Deposit Insurance Corporation; National Credit Union Administration, and the Office of the Comptroller of the Currency) (see Enforcement Manual section on Relationship with Federal Financial Agencies and other Regulatory Agencies);

    5. Securities and Exchange Commission (see Enforcement Manual section on Relationship with Federal Financial Agencies and other Regulatory Agencies);

    6. State Insurance Agencies;

    7. State Attorneys General; and

    8. National Association of Insurance Commissioners.

EBSA Authority
EBSA(1) has the authority to: Source See also
Investigate potential violations of ERISA Title I ERISA Sections 504 and 506
Investigate and determine whether a person has violated ERISA Title I or any related regulations or orders ERISA Section 504(a)
Investigate criminal violations of U.S. Code Title 18 as they relate to employee benefit plans Comprehensive Crime Control Act of 1984
ERISA Section 506(b)		 Figure 2
Criminal Investigations Section
Share information with people affected by the subject of an EBSA investigation (usually, but not exclusively, plan fiduciaries, participants, beneficiaries, or their representatives)
Note: This provision does not authorize EBSA to disclose information prohibited by another statute. See the section on Release of Information for disclosure restrictions.		 ERISA Section 504(a) Figure 1
Investigate and present issues related to whether a federal court should grant a Certificate of Exemption under Section 411(a) MOU between the Department and DOJ Prohibited Persons Section
Obtain Protected Health Information from health plans, service providers, and physicians to ensure compliance with ERISA HIPAA
Litigate civil cases related to ERISA (with a few exceptions) in district courts and courts of appeal
Note: The Department of Justice will prosecute all cases involving ERISA's criminal provisions.		 Feb. 11, 1975 MOU between the Department and DOJ

1 The Secretary of Labor can delegate this authority to the Assistant Secretary of Labor for Employee Benefits and Security.

(Figure 1)
Secretary's Order 01-2003

Subject: Delegation of Authority and Assignment of Responsibilities to the Employee Benefits Security Administration

  1. Purpose. To delegate authority and assign responsibilities for the administration of the Department of Labor's responsibilities under the Employee Retirement Income Security Act of 1974 (ERISA), the Welfare Pension Plans Disclosure Act (WPPDA) and the Federal Employees' Retirement System Act of 1986 (FERSA), and to change the name of the office of the Assistant Secretary for Pension and Welfare Benefits and the Pension and Welfare Benefits Administration (PWBA).

  2. Authority and Directives Affected. This Order is issued pursuant to 5 U.S.C. 301; 29 U.S.C. 551, et seq.; and 5 U.S.C. 5315. This order supersedes the Secretary's Order 1-87, 52 Fed. Reg. 13139 (Apr. 21, 1987), and the memoranda to Meredith Miller, on Oct. 28, 1998, 63 Fed. Reg. 59339 (Nov. 3, 1998), and on December 16, 1998, 63 Fed. Reg. 71506 (Dec. 28, 1998).

  3. Background. ERISA places responsibility in the Department of Labor for the administration of a comprehensive program to protect the interests of participants and beneficiaries of private sector employee benefit plans. Secretary's Order 1-87 delegated authority for this program to the Pension and Welfare Benefits Administration (PWBA), which was headed by the Assistant Secretary for Pension and Welfare Benefits who reported to the Secretary of Labor.

    FERSA requires the Department of Labor to, among other things, administer and enforce the fiduciary responsibility, prohibited transaction, and bonding provisions of FERSA. Secretary's Order 1-87 also delegated these responsibilities to PWBA.

    In more recent years, statutes such as the Health Insurance Portability and Accountability Act of 1996 (HIPAA), the Newborns' and Mothers' Health Protection Act of 1996, the Mental Health Parity Act of 1996, the Women's Health and Cancer Rights Act of 1998, and the Child Support Performance and Incentive Act of 1998 amended ERISA. Pursuant to Secretary's Order 1-87, PWBA has carried out the Department's additional responsibilities under these Acts.

    Changing the agency's name to the Employee Benefits Security Administration (EBSA) will more clearly communicate the agency's mission of protecting private sector employee benefits. Restating the delegations contained in Secretary's Order 1-87, and including an additional delegation regarding claims of governmental privileges, previously published separately, will provide a single source for questions regarding the Assistant Secretary's current authority and responsibility.

  4. Re-Designation of the Assistant Secretary for Pension and Welfare Benefits and the Pension and Welfare Benefits Administration.

    1. The title and position of the Assistant Secretary for Pension and Welfare Benefits is re-designated Assistant Secretary for Employee Benefits Security. The Office of the Assistant Secretary for Pension and Welfare Benefits is re-designated the Office of the Assistant Secretary for Employee Benefits Security, and

    2. The Pension and Welfare Benefits Administration is re-designated as the Employee Benefits Security Administration.

    3. All offices, subdivisions and positions within the Department of Labor deriving their names in whole, or in part, from the Office of the Assistant Secretary for Pension and Welfare Benefits or the Pension and Welfare Benefits Administration shall accomplish an appropriate change of name pursuant to this order.

    4. All employees of the Office of Assistant Secretary for Pension and Welfare Benefits and the Pension and Welfare Benefits Administration are re-designated employees of the Office of the Assistant Secretary for Employee Benefits Security Administration, respectively.

    5. All programs, activities, functions, and responsibilities delegated to the Office of the Assistant Secretary for Pension and Welfare Benefits or the Pension and Welfare Benefits Administration are re-designated programs, activities, functions and responsibilities of the Office of the Assistant Secretary for Employee Benefits Security or the Employee Benefits Security Administration, respectively.

    6. All currently effective delegations made by the Assistant Secretary for Pension and Welfare Benefits to employees of the Pension and Welfare Benefits Administration are deemed delegations by the Assistant Secretary for Employee Benefits Security to employees of the Employee Benefits Security Administration.

    7. Other agencies within the Department of Labor shall make any appropriate re-designation in conformity with the spirit and purpose of this order.

  5. Delegation of Authority and Assignment of Responsibilities

    1. Except as hereinafter provided, the Assistant Secretary for Employee Benefits Security is delegated the authority (including the authority to re-delegate) and assigned the responsibilities of the Secretary of Labor:

      1. under the following statutes, including any amendments:

        1. The Employee Retirement Income Security Act of 1974, as amended, except for subtitle C of Title III and Title IV (29 U.S.C. §§ 1001-1232);

        2. the Welfare and Pension Disclosure Act of 1958, as amended Pub. L. 85-836, 72 Stat. 997; Pub. L. 86-624, 74 Stat. 417; Pub. L. 87-420, 76 Stat. 35;

        3. The Federal Employees' Retirement System Act of 1986 (5 U.S.C. §§ 8401-8479); and

        4. as directed by the Secretary, such additional Federal acts similar to or related to those listed in paragraphs (i) through (iii), above, that from time to time may assign additional authority or responsibilities to the Secretary.

      2. to request information the Internal Revenue (IRS) possesses for use in connection with the administration of Title I of ERISA of 1974.

      3. to invoke all appropriate governmental privileges, arising from the functions of the Employee Benefits Security Administration, following his/her personal consideration of the matter and in accordance with the following guidelines:

        1. Generally Applicable Guidelines. The Assistant Secretary may not re-delegate the authority to invoke a privilege. The privilege may be asserted only with respect to specifically described information and only where the Assistant Secretary determines the privilege is applicable. In asserting a privilege, the Assistant Secretary shall articulate in writing the specific reasons for preserving the confidentiality of the information.

        2. Informant's Privilege (to protect from disclosure the identity of any person who has provided information to the Employee Benefits Security Administration in cases arising under the statutory provisions listed in 5.a.(1) of this order that are delegated or assigned to the Employee Benefits Security Administration). To assert this privilege, the Assistant Secretary must first determine that disclosure of the privileged matter may: (A) interfere with the Employee Benefits Security Administration's enforcement of a particular statute for which it exercises investigative or enforcement authority; (B) adversely affect persons who have provided information to the Employee Benefits Security Administration; or (C) deter other persons from reporting violations of the statute.

        3. Deliberative Process Privilege (to withhold information which may disclose pre-decisional intra-agency or inter-agency deliberations in cases arising under the statutory provisions listed in paragraph 5.a.(1) of this order including: the analysis and evaluation of facts; written summaries of factual evidence; and recommendations, opinions, or advice on legal or policy matters.) To assert this privilege, the Assistant Secretary must first determine that: (A) the information is not purely factual and does not concern recommendations that the department expressly adopted or incorporated by reference in its ultimate decision; (B) the information was generated prior to and in contemplation of a decision by a part of the Department; and (C) disclosure of the information would have an inhibiting effect on the Department's decision-making process.

        4. Privilege for Investigative Files compiled for law enforcement purposes (to withhold information which may reveal the Employee Benefits Security Administration's confidential investigative techniques and procedures). To assert this privilege, the Assistant Secretary must first determine that disclosure of the privileged matter may have an adverse impact upon the Employee Benefits Security Administration's enforcement of the statutory provisions listed in paragraph 5.a.(1) of this order, by: (A) disclosing investigative techniques and methodologies; (B) deterring persons from providing information to the Employee Benefits Security Administration; (C) prematurely revealing the facts of the Department's case; or (D) disclosing the identities of person who have provided confidential information under an express or implied promise of confidentiality.

        5. Prior to filing a formal claim of privilege, the Assistant Secretary shall personally review the information sought to be withheld, including all documents sought to be withheld (or, in cases where the volume of information is so large all of it cannot be personally reviewed in a reasonable time, an adequate and representative sample of such information) and a description or summary of the litigation in which the disclosure is sought.

        6. The Assistant Secretary may comply with any additional requirements imposed by local court rules or precedent in asserting a governmental privilege.

        7. In asserting a governmental privilege, the Assistant Secretary may ask the Solicitor of Labor or the Solicitor's representative to prepare and file any necessary legal papers or documents.

    2. The Solicitor of Labor is responsible for providing legal advice and assistance to all officials of the Department relating to the administration of the statutes listed in paragraphs 5.a.(1) of this order, for bringing appropriate legal actions on behalf of the Secretary, and representing the Secretary in all civil proceedings. The Solicitor of Labor is also authorized to request information the IRS possesses for use in connection with the administration of Title I of ERISA.

    3. The Inspector General is authorized to request information the IRS possesses for use in connection with the administration of Title I of ERISA.

  6. Reservation of Authority

    1. The submission of reports and recommendations to the President and the Congress concerning the administration of the statutes listed in paragraph 5.a.(1) of this order and responsibilities under Subtitle C of Title III of ERISA are reserved to the Secretary. The Pension Benefit Guaranty Corporation carries out responsibilities under Title IV of ERISA.

    2. This Secretary's Order does not affect the authorities and responsibilities of the Office of Inspector General under the Inspector General Act of 1978, as amended, or under Secretary's Order 2-90 (January 31, 1990)

  7. Effective Date. This order is effective upon date of publication in the Federal Register.

/s/ Elaine L. Chao
Secretary of Labor

January 23, 2003

(Figure 2)
Memorandum Of Understanding

Memorandum of Understanding Between the Departments of Justice and Labor Relating to the Investigation and Prosecution of Crimes and Related Matters under Title I of the Employee Retirement Income Security Act of 1974

It is hereby agreed and understood between the Department of Justice and the Department of Labor as follows:

Whereas Title I of the Employee Retirement Income Security Act of 1974 (P.L. 93-406, 88 Stat. 829, 29 U.S.C. 1001, hereinafter referred to as "the Act") imposes certain duties and responsibilities upon the Attorney General and the Secretary of Labor with regard to prosecution of crimes and related matters arising under the Act; and

Whereas, section 504 of the Act imposes upon the Secretary of Labor the responsibility for conducting investigations of persons who have violated or are about to violate any provision of Title I of the Act or any regulation issued thereunder; and

Whereas, section 506 of the Act provides that the Secretary of Labor may make interagency agreements to avoid unnecessary expense and duplication of functions among government agencies and ensure cooperation and mutual assistance in the performance of his functions under the Act; and

Whereas, section 506 of the Act provides that the Attorney General or his representative shall receive from the Secretary of Labor for appropriate action such information developed in the performance of the Secretary's functions under Title I of the Act as may be found to warrant consideration for criminal prosecution; and

Whereas, it is desirable and essential that the areas of responsibility and the procedure to be used in investigations and prosecutions of offenses arising under the Act should be the subject of a formal agreement between the Departments;

  1. Criminal Prosecution

    All cases involving violation of criminal provisions of the Act will be prosecuted by the Department of Justice. Those cases investigated by the Department of Labor which may warrant criminal prosecution will be referred to the Management and Labor Section, Criminal Division, Department of Justice.

  2. Investigations of Matters made Criminal by the Act

    Subject to specific arrangements agreed upon by the two Departments on a case-by-case basis, investigations of criminal matters under the Act will be conducted as follows:

    1. The Department of Justice will investigate all matters arising under 18 U.S.C. 664 (theft or embezzlement from employee benefit plan), 1027 (false statements and concealment of facts in relation to documents required by the Act) and 1954 (offer, acceptance, or solicitation to influence operations of employee benefit plans).

    2. The Secretary of Labor will either on complaint of a violation or on his own motion investigate through his own staff all matters that may form the basis for possible criminal action under section 501 of the Act. These matters include reporting and disclosure provisions under Part I of Title I of the Act and any regulations issued thereunder.

    3. The Department of Justice will under delegation from the Secretary of Labor investigate those criminal matters arising under:

      1. Section 411 of the Act (prohibition against certain persons being a consultant to, employed by, or holding office in an employee benefit plan and against allowing such persons to act as a consultant to, be employed by, or hold office in an employee benefit plan).

      2. Section 511 of the Act (interference with the rights of a participant or beneficiary by fraud or coercion).

  3. Parole Board Proceedings

    The investigation and presentation of issues concerning the appropriateness of a grant of a certificate under Section 411(a) of the Act to a person by the Board of Parole of the Department of Justice will be the responsibility of the Department of Labor, including appearances before the Board of Parole.

  4. Instructions

    So that the terms of this Memorandum of Understanding will be effectively performed, both Departments will issue instructions for the guidance of their officers and employees in the matters referred to in the preceding paragraphs, such instructions to be submitted for comment to the other Department prior to their issuance.

  5. Adjustments

    Periodic reviews of this agreement will be made to determine whether any adjustments are desirable in light of experience under the Act.

/S/ Peter J. Brennan
Secretary of Labor

/S/ L. N. Silberman
(Acting) Attorney General

February 5, 1975

 

February 8, 1975

(Figure 3)
United States Department Of Justice
United States Department Of Labor
Memorandum Of Understanding

Whereas, the Employee Retirement Income Security Act of 1974 (P.L. 93-406; 88 Stat. 829), the Occupational Safety and Health Act of 1970 (P.L. 91-596; 84 Stat, 1590), and the Farm Labor Contractor Registration Act Amendments of 1974 (P.L. 93-518; 88 Stat. 1652), each provide that except for litigation in the Supreme Court of the United States and the United States Court of Claims, attorneys appointed by the Secretary of Labor may represent the Secretary in civil actions, subject to the direction and control of the Attorney General;

Whereas, this memorandum has been entered into in accordance with the legislative history of the aforementioned provisions; and

Whereas, satisfactory cooperative relationships exist between the Civil Division of the Department of Justice and the Department of Labor with respect to the conduct of litigation under other statutes administered by the Department of Labor;

Now, therefore, the following memorandum of understanding is entered into between the Attorney General of the United States and the Secretary of Labor for the purposes of promoting the efficient and effective handling of government litigation concerning these statutes.

  1. It is the intention of the Attorney General to delegate primary litigative responsibility for the preparation and presentation of most civil cases arising in the district court and courts of appeal under the Occupational Safety and Health Act of 1970, the Employee Retirement Income Security Act of 1974, and the Farm Labor Contractor Registration Act of 1974, to attorneys appointed by the Secretary of Labor. The delegation of primary litigative responsibility shall, in the normal course, include the preparation and filing of all papers, the conduct of trials and the presentation of oral arguments. These activities shall be performed with the cooperation and assistance of the United States Attorneys and the Civil Division of the Department of Justice and be subject to the direction and control of the Attorney General.

  2. There will be, however, a limited number of cases in which primary litigative responsibility may be retained in the Civil Division of the Department of Justice.

    The criteria for retention of primary litigative responsibility are:

    1. Cases raising significant issues concerning the validity or construction of statutes or important governmental regulatory schemes;

    2. Cases having a significant impact on, or which can be expected to have a significant impact on, the government as a whole, or on agencies, or programs of agencies, other than the Department of Labor.

  3. To facilitate determinations by the Assistant Attorney General for the Civil Division as to the delegation of primary litigative responsibility, the Department of Labor shall, as to any case subject to this memorandum, provide the Civil Division with:

    1. A copy of any claim, complaint or petition for review proposed to be filed by the Department of Labor;

    2. A copy of any complaint, responsive pleading or petition for review filed by a party to litigation other than the Department of Labor, whenever such pleading has not otherwise been served on the Attorney General;

    3. Immediate notice should a case, the primary responsibility for which has been delegated to the Department of Labor, come within the criteria of paragraph 2, supra, during the course of the proceedings in that case;

    4. A memorandum proposing an appeal be taken from a district court from a decision adverse to the government; and

    5. A memorandum describing any case in which a district court decision favorable to the government has been appealed by another party to the litigation.

    The Department of Labor shall provide the Civil Division with all of the material necessary for a determination as to the delegation of primary litigative responsibility within a reasonable time. The Assistant Attorney General for the Civil Division shall make the determination within 20 days time of receipt of the above material or within such reasonable time as the exigencies of the situation demand.

  4. In each instance where the Civil Division determines to retain primary litigative responsibility for the handling of litigation under the criteria set forth in paragraph 2, supra, it shall be the responsibility of the Assistant Attorney General for the Civil Division to set forth in writing in a communication to the Solicitor of Labor the basis for the retention of primary responsibility and the reasons therefore. If the Solicitor of Labor disagrees with any such determination, he shall present his views to the Deputy Attorney General who shall have final authority to resolve the matter.

  5. In the conduct of any litigation subject to this agreement, regardless of where primary litigative responsibility is reposed, Department of Justice and Department of Labor attorneys will cooperate and collaborate in the preparation and representation of such actions and the Attorney General will retain the final authority to determine, where appropriate, the government's litigating position.

  6. This memorandum is intended to provide a general description of the delegation of litigation responsibility. Decisions regarding the implementation of this agreement, including the development of special procedures for the handling of cases in which circumstances require the immediate filing of a pleading, are to be made by the Solicitor of Labor and the Assistant Attorney General for the Civil Division.

  7. Nothing in this agreement shall affect any authority of the Department of Labor to take action under the statutes subject to this agreement, other than the instituting or conducting of litigation in court under such statutes.

  8. Nothing in this agreement shall affect any authority of the Solicitor General to authorize or decline to authorize appeals by the government from any district court to any appellate court or petitions to such courts for the issuance of extraordinary writs, such as the authority conferred by 28 C.F.R. 0.20(b).

  9. In order effectively to implement the terms of this Memorandum, each Department will issue to all personnel affected by its provisions a copy of this Memorandum. This Memorandum shall not preclude both Departments from entering into mutually satisfactory arrangements concerning the handling of a particular case.

  10. This agreement shall apply to all cases filed on or after the date of approval of this agreement by the Department of Justice and the Department of Labor.

With respect to cases arising before the effective date of this agreement, the Departments of Justice and Labor shall enter into mutually satisfactory arrangements for the transfer of litigation responsibility in individual cases, consistent with the purposes of this agreement and where such transfer will not be prejudicial to the handling of such cases.

/S/ Laurence H. Silberman
Attorney General

/S/ Peter J. Brennan
Acting Secretary of Labor

February 11, 1975

 

February 11, 1975

Footnotes

  1. This Order superseded Secretary's Order 1-86 dated January 16, 1986 that transferred the delegated authority and assigned responsibilities for the administration of ERISA from the Office of Pension Welfare Benefit Programs to the Pension and Welfare Benefits Administration.
  2. Regional Directors have received re-delegated authority and assigned responsibility for ERISA enforcement activities, including authority to sign and issue certain subpoenas, among other powers. Regional Directors have discretion to further delegate certain signatory responsibility to selected staff. See Subpoenas section.
  3. This authority has been redelegated to the Deputy Assistant Secretary for Program Operations and the Director of Enforcement.
  4. Secretary's Order 01-2003 superseded Secretary's Order 1-87. 68 Fed. Reg. 5373 (Feb. 3, 2003).

Administrative Procedures

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  1. Release of Information to News Media and the Public.

    1. The Department's Office of Public Affairs writes all news releases. Regional public affairs staff will prepare news announcements for decentralized litigation with the respective field office and the Regional Solicitor's Office. EBSA field offices are responsible for coordinating the release of information concerning criminal prosecutions with the U.S. Attorney's Office(s) in their jurisdiction. The field office is responsible for forwarding copies of the relevant court documents and the issued news release to the National Office. Public affairs staff will handle follow-up inquiries on news announcements.

    2. In the case of questions from news media or the public concerning open investigations, employees should not confirm or deny the existence or consideration of an investigation unless special circumstances warrant otherwise. If the RO is satisfied that knowledge of an open investigation is in the public domain, the Regional Director (RD) or Deputy Regional Director may confirm the existence of an investigation; however, no EBSA staff should comment on the investigation. A RO should direct requests for a variance from this policy to the Director of Enforcement.

  2. Release of Information Pursuant to ERISA §504.

    1. The Secretary can provide information concerning a matter that may be the subject of an investigation to any person actually affected by that matter, and to any federal department or agency. However, any information obtained by the Secretary pursuant to IRC § 6103 is available only in accordance with regulations prescribed by the Secretary of the Treasury.(1) (See paragraph 7 for treatment of IRS information.)

    2. EBSA may not disclose any information concerning any matter under an open investigation without RD approval. Information concerning any matter that is the subject of a closed investigation may be disclosed pursuant to ERISA §504, subject to the restrictions imposed by various statutes and rules. These statutes and rules include: the Freedom of Information Act (see paragraph 4), the Right to Financial Privacy Act (see paragraph 5), the Privacy Act (see paragraph 6), the Internal Revenue Code (see paragraph 7), Rule 6(e) of the Federal Rules of Criminal Procedure (see paragraph 8), and 18 U.S.C. §1905 prohibiting disclosure of confidential information (Figure 1).

  3. Release of Information Pursuant to Subpoena.

    The Department's regulations set forth at 29 CFR Part 2, Subpart C concern responses to subpoenas, orders, or other demands which call for the production or disclosure of material contained in Departmental files, or information relating to material contained in such files, in connection with proceedings to which the Department is not a party. An employee who receives a subpoena to produce material or disclose information must immediately notify the appropriate Associate or Regional Solicitor's Office by forwarding a copy of the subpoena, order, or other demand calling for the production or disclosure of material for evaluation. In addition, the RO should notify OE when it receives a third-party subpoena.

    Investigators/Auditors shall not comply with a subpoena except upon approval of the Deputy Solicitor of Labor. Even in the face of a court order directing immediate compliance with a subpoena, there is no disclosure of information without authorization from the Deputy Solicitor. The Solicitor's Office will represent any employee ordered by a court to comply with a subpoena.

  4. Release of Information Pursuant to the Freedom of Information Act.

    1. The Freedom of Information Act (FOIA), 5 U.S.C. §552, requires federal agencies to make records promptly available to any person whose request reasonably describes the records sought and who complies with procedures for making such requests. Departmental regulations on FOIA are at 29 C.F.R. Part 70.

      Normally an agency must respond to a request within 20 business days. If an agency cannot respond within 20 business days, the agency should get an extension of the deadline from the requester by phone, then confirm in writing.

    2. Federal agencies are not required to disclose material that falls within the nine exemptions set forth in FOIA. These exemptions are for material concerning:

      1. National security or foreign policy;

      2. Internal agency personnel rules and practices;

      3. Specific exemptions provided for by statute;

      4. Trade secrets and privileged or confidential commercial and financial information;

      5. Inter-agency and intra-agency memoranda and letters not available by law to a party in litigation with the agency;

      6. Personnel and medical files;

      7. Law enforcement records or information;

      8. Financial regulatory matters; and

      9. Technical information about wells.

      Exemptions most relevant to Investigators/Auditors are 4 through 8. See paragraph 5 for a discussion of the exemption dealing with information from financial regulatory agencies.

    3. By Executive Order 12600 and Departmental regulations 29 CFR 70.26, Exemption 4 of the FOIA establishes procedures required before deciding to release certain categories of records. When the Department receives a claim of confidential commercial information from a party providing information to the Department, the RO must include a copy of the request in the case file. In addition, the RO should forward a copy of the request to OE.

      The Department should coordinate with appropriate RSOL when responding to FOIA requests involving information protected by Exemption 4.

    4. The RD and DS, by regulation, are designated FOIA Disclosure Officers, with signatory authority for FOIA responses.

  5. Release of Information Obtained from Financial Regulatory Agencies

    1. Exemption 8 of FOIA permits officials to withhold materials related to examination, operations, or condition reports prepared by, on behalf of, or for the use of an agency responsible for the regulation or supervision of financial institutions. Under Departmental regulations, officials must refuse to disclose information from financial regulatory agencies unless there is express authority permitting it.

    2. The Right to Financial Privacy Act (RFPA), 12 U.S.C. §3401 et seq., prohibits any agency or department of the United States from obtaining financial records of a customer from a financial institution unless the records are reasonably described, and the disclosure is authorized by the customer, or the records are disclosed in response to an administrative subpoena that meets specific requirements as set forth in the Act. (See paragraph 14 of the Subpoenas section for a more complete explanation of the RFPA.) Once a government agency obtains such financial information, it may transfer the financial records to another federal agency only if an official of the transferring agency certifies in writing that there is reason to believe that the records are relevant to a legitimate law enforcement inquiry of the receiving agency. In addition, within 14 days after any transfer, the agency must notify the customer of the transfer unless the government has obtained a court order delaying notice. See Figure 2 for a model notice letter.

      Transfer restrictions do not apply to intra-departmental transfers or to transfers from state or local government agencies to federal agencies or from federal to state agencies.

  6. Release of Information Subject to the Privacy Act.

    1. The Privacy Act, 5 U.S.C. §552a, provides that, with certain exceptions, an agency must not disclose any record contained in a system of records from which information is retrieved by the name of the individual or by some identifying number, symbol, or other identifying particular assigned to the individual unless it has permission of the individual to whom the record pertains. The Privacy Act sets forth criminal penalties for officials who willfully disclose such material to a person or agency not entitled to receive it. Departmental regulations concerning the Privacy Act are at 29 C.F.R. Part 70a.

    2. The Privacy Act also provides that any agency that maintain a system of records containing personal information that retrieves by name, social security number, or some other identifying number, symbol, or identifying particular, must ensure that administration of the file complies with Privacy Act requirements. The Department has taken the position that Privacy Act provisions exempt its investigatory files from these requirements because the Department compiles the investigatory material for law enforcement purposes. In addition, Departmental regulations deny disclosure to anyone, including the individual subject of the record, of information compiled in reasonable anticipation of a civil action or proceeding.

    3. RDs or DSs have primary responsibility for Privacy Act compliance.

  7. Release of Information Obtained from the IRS.

    1. IRC § 6103 generally prohibits the IRS from disclosing federal tax returns and return information (Federal Tax Information). However, exceptions to the general prohibition allow the IRS to furnish tax returns and return information to the Department for the enforcement of Title I of ERISA. As a condition of receiving federal tax returns and return information, the Department must establish and maintain, to the satisfaction of the IRS, certain safeguards designed to prevent unauthorized uses of the information and to protect the confidentiality of that information.

    2. Any Department employee who illegally discloses tax information received from the IRS may be subject to criminal penalties under IRC section 7213 (a $5,000 fine, five years imprisonment, or both), as well as civil damages under IRC section 7431 (Figure 3). These civil and criminal penalties apply even for unauthorized disclosures made after ending employment with the Department.

      All employees should ensure that they do not disclose tax information to unauthorized persons or use such information for unauthorized purposes. Employees may disclose tax returns and return information only to the extent necessary to conduct an investigation or prepare for litigation. Among those persons to whom returns and return information may be disclosed for such purposes are other Department employees, employees of other federal agencies, and court reporters. In addition, any Department employee who performs an unauthorized inspection of tax information received from the IRS may be subject to criminal penalties under IRC section 7213A (a $1,000 fine, one year imprisonment, or both).

    3. If during any investigation, the RD or DS believes that information in the possession of the IRS will help in carrying out the provisions of Title I, they can send a written request to the IRS using the format in Figure 4. Copies of the requests should be retained a minimum of five years.

    4. Access to federal tax information must be strictly on a need-to-know basis. A variety of internal safeguards can accomplish restricted access, including:

      1. Keep federal tax information separate from other information as much as possible. If impractical, clearly label files to indicate that federal tax information is included.

      2. Set up and maintain any files containing federal tax information (including the IRS Form 6212-B Checksheet) in a secured area. Each office holding IRS 6103 information must maintain an EBSA Form 534 (IRS Safeguard Inventory and Destruction Log). The files should only be accessible by authorized individuals and all areas where federal tax information is present should be locked during non-duty hours.

      3. Do not mix federal tax information with other information in a way that could inadvertently compromise its confidentiality. For example, do not include any federal tax information when giving documents to a clerk/typist, unless it is essential to their duties.

      Employees must maintain all federal tax returns and tax information in accordance with the procedures set forth in the Release of Information section.

    5. After using federal tax information, either return the information (including any copies made) to the office from where originally obtained or destroy the information by burning, mulching, pulping, shredding, or disintegrating.

      These safeguards cease to apply to any return or return information disclosed in the course of any judicial or administrative proceeding and made a part of the public record thereof.

  8. Documents Obtained from a Grand Jury.

    1. Rule 6(e) of the Federal Rules of Criminal Procedure prohibits the disclosure of matters occurring before a grand jury. A knowing violation of the rule may be punished as contempt of court. A violation of the rule can jeopardize an investigation to the extent that civil litigation may become impossible.

    2. Employees must maintain in a secure manner all documents or transcripts of a grand jury obtained during an investigation. Employees may not disclose such information to anyone, including other Department employees, unless the court authorizes that person to have access to the material. See section on Criminal Investigations.

  9. Release of Documents to Other Government Agencies.

    At times, another government agency may request documents from EBSA. If there is a Memorandum of Understanding (MOU) with that agency, it should follow the procedures identified in the MOU. If there is no MOU, the other agency should submit an access request letter to EBSA. If appropriate, the agency and EBSA should execute a common interest agreement.

(Figure 1)
18 U.S.C. 1905. Disclosure of Confidential Information Generally

Whoever, being an officer or employee of the United States or of any department or agency thereof, any person acting on behalf of the Federal Housing Finance Agency, or agent of the Department of Justice as defined in the Antitrust Civil Process Act (15 U.S.C. 1311-1314), or being an employee of a private sector organization who is or was assigned to an agency under chapter 37 of title 5, publishes, divulges, discloses, or makes known in any manner or to any extent not authorized by law any information coming to him in the course of his employment or official duties or by reason of any examination or investigation made by, or return, report or record made to or filed with, such department or agency or officer or employee thereof, which information concerns or relates to the trade secrets, processes, operations, style of work, or apparatus, or to the identity, confidential statistical data, amount or source of any income, profits, losses, or expenditures of any person, firm, partnership, corporation, or association; or permits any income return or copy thereof or any book containing any abstract or particulars thereof to be seen or examined by any person except as provided by law; shall be fined under this title, or imprisoned not more than one year, or both; and shall be removed from office or employment.

(Figure 2)
Notice of Transfer of Financial Records

Dear (Name of Customer):

Copies of, or information contained in, your financial records lawfully in the possession of the Employee Benefits Security Administration, U.S. Department of Labor, have been furnished to ____________________________ (Government Agency) pursuant to the Right to Financial Privacy Act of 1978 for the following purpose(s):

If you believe that this transfer has not been made to further a legitimate law enforcement inquiry, you may have legal rights under the Right to Financial Privacy Act of 1978 or the Privacy Act of 1974.

Sincerely,
Regional Director

(Figure 3)
Unauthorized Disclosure of Information

Sec. 7213(a)(1) [Internal Revenue Code of 1986]

Federal employees and other persons -- It shall be unlawful for any officer or employee of the United States or any person described in section 6103(n) (or an officer or employee of any such person), or any former officer or employee, willfully to disclose to any person, except as authorized in this title, any return or return information (as defined in section 6103(b)). Any violation of this paragraph shall be a felony punishable upon conviction by a fine in an amount not exceeding $5,000, or imprisonment of not more than 5 years, or both, together with the costs of prosecution, and if such offense is committed by any officer or employee of the United States, he shall, in addition to any other punishment, be dismissed from office or discharged from employment upon conviction for such offense.

Civil Damages for Unauthorized Inspection or Disclosure of Returns and Return Information

Sec.7431(a)(1) [Internal Revenue Code of 1986]

Inspection or disclosure by employee of United States -- If any officer or employee of the United States knowingly, or by reason of negligence, inspects or discloses any return or return information with respect to a taxpayer in violation of any provision of section 6103, such taxpayer may bring a civil action for damages against the United States in a district court of the United States.

(Figure 4)

Internal Revenue Service
Manager, EP Classification
31 Hopkins Plaza
Room 1550
Baltimore, MD 21201

RE: Name and address of plan
EIN/PN
EBSA Case No.

Dear _____________________:

In connection with the administration of Title I of the Employee Retirement Income Security Act of 1974 (ERISA), and a current investigation conducted by the Employee Benefits Security Administration (EBSA) it is requested that you make the documents listed in the attached available to this office, pursuant to section 6103(l)(2) of the Internal Revenue Code.

I would appreciate your furnishing the requested documents and, if necessary, discussing their contents with the following individuals of the Department of Labor (select as appropriate and state proper names):

Regional Office, EBSA

Regional Director
Deputy Regional Director
District Supervisor
Supervisory Investigator
Investigator/Auditor

National Office, EBSA

Director of Enforcement
Chief, Division of Field Operations and Support, Office of Enforcement
Chief, Division of Criminal Investigations, Office of Enforcement
Investigator/Auditor

Office of the Solicitor

Solicitor
Associate Solicitor, Plan Benefits Security Division (PBSD)
Deputy Associate Solicitor, PBSD
Counsel for Regulations, PBSD
Counsel for General Litigation, PBSD
Counsel for Fiduciary Litigation, PBSD
Counsel for Appellate and/or RSOL Decentralized Litigation, PBSD
Staff Attorney, PBSD
Regional Solicitor
Staff Attorney, RSOL

This information is necessary and is being requested for the purpose of the administration of Title I of ERISA. It is understood that the information furnished by the Internal Revenue Service will be used strictly in accordance with, and subject to the limitations of, the disclosure provisions of the Internal Revenue Code pertaining to confidentiality and taxpayer rights to privacy. The Department of Labor representatives are also aware of the penalty provisions of section 7213 of the Internal Revenue Code and section 1905 of Title 18 of the United States Code with respect to their use of this information.

Sincerely,
Regional Director/District Supervisor

cc: Director of Enforcement

Attachment to Request for Federal Tax Returns

  1. At this time, a request is hereby made for IRS transcripts of the tax information/forms listed below.

    Or

    A request is hereby made for copies of the tax information/forms listed below. These copies are being requested rather than transcripts because of (Investigators should enter court proceedings, other imminent events and related dates).

    Taxpayer Name:

    Taxpayer Address:

    Taxpayer TIN (SSN or EIN):

    Federal Tax Information/Form Requested:

    Plan/Tax Year(s) Requested:

    Taxpayer Name:

    Taxpayer Address:

    Taxpayer TIN (SSN or EIN):

    Federal Tax Information/Form Requested:

    Plan/Tax Year(s) Requested:

    Taxpayer Name:

    Taxpayer Address:

    Taxpayer TIN (SSN or EIN):

    Federal Tax Information/Form Requested:

    Plan/Tax Year(s) Requested:

Attachment to Request for IRS Reports, Correspondences & Documents

  1. A request is hereby made for copies of the following reports and/or correspondences for the plan/sponsor/fiduciary listed below: [Choose from below as applicable.] (Investigators should provide as much detail as known, such as IRS agent name, and IRS division or group.)

    1. Any reports, reports of investigation or interview, or memoranda related to the below-referenced plan, its sponsor or fiduciaries and any work papers related thereto or related to any audit of the above-referenced plan or its sponsors, including, but not limited to, any conclusive findings developed by the IRS Office as a result of its investigation and review. The reports of investigation, interviews or memoranda requested include information relating to any exclusive benefit rule/fiduciary disqualification of the plan.

    2. Any correspondence or memoranda reflecting communications between the IRS and the below-referenced plan, its sponsors or its fiduciaries in regard to any of the above, including, but not limited to, any tax exempt status and IRS responses.

    3. Reports or documents of any nature, plus attachments, filed by or obtained from the below-referenced plan, its sponsors, its fiduciaries, and any other persons affiliated with the above-referenced plan.

    [Complete the appropriate items below.]

    Plan/Sponsor/Fiduciary Name:

    Address:

    Taxpayer TIN (SSN or EIN):

    Plan/Tax Year(s) Requested (if known):

    Plan/Sponsor/Fiduciary Name:

    Address:

    Taxpayer TIN (SSN or EIN):

    Plan/Tax Year(s) Requested (if known):

    Plan/Sponsor/Fiduciary Name:

    Address:

    Taxpayer TIN (SSN or EIN):

    Plan/Tax Year(s) Requested (if known):

    Plan/Sponsor/Fiduciary Name:

    Address:

    Taxpayer TIN (SSN or EIN):

    Plan/Tax Year(s) Requested (if known):

    Plan/Sponsor/Fiduciary Name:

    Address:

    Taxpayer TIN (SSN or EIN):

    Plan/Tax Year(s) Requested (if known):

Footnotes

  1. ERISA §504

Enforcement Programs

Expand All | Collapse All

  1. Statutory Requirements. Section 510(1) provides for the Secretary, or a participant or beneficiary to bring civil proceedings under the provisions of Section 502 of ERISA.

  2. Elements. The following are basic elements necessary to establish that a violation has occurred:

    1. The plan is an employee benefit plan within the meaning of either Section 3(1) or 3(2) of ERISA and meets the coverage requirements of Section 4 of ERISA;

    2. The complainant is a plan participant or beneficiary within the meaning of Section 3(7) or 3(8) or has given information, has testified, or is about to give testimony relating to ERISA;

      The complainant was discharged, fined, suspended, expelled, disciplined, or discriminated against:

      1. For exercising any right to which s/he is entitled under the provisions of an employee benefit plan, Title I of ERISA, or Section 3001 of ERISA; or

      2. For the purpose of interfering with the attainment of any right to which the complainant may become entitled under the plan, or Title I of ERISA; or

      3. The complainant has given information or has testified or is about to testify in any inquiry or proceeding relating to ERISA.

  3. Source of Case Opening Data. An investigator may open a case after receiving a written or oral complaint. It is best to obtain a written statement of the allegations from the complainant before opening a case. The written complaint should be as complete and specific as possible:

    1. Setting forth the date of the complainant's termination or other disciplinary action;

    2. Identifying what the complainant believes to be the reason for the action; and

    3. Including any correspondence between the complainant and the employer, union, plan, etc.

  4. Preliminary Steps Prior to Opening a Case

    1. Complainant should identify the benefit or the benefit right he/she was deprived of by the adverse action.(2)

    2. Advise complainant his/her name might be used during the investigation.

    3. Consider the possibility of age discrimination or other equal opportunity employment case. Refer complainant to the Equal Employment Opportunity Commission, as appropriate. Tell complainant if you do not open a case.

      Statute of limitations analysis should use the most analogous state law cause of action to determine the limitations period and be done in consultation with the SOL.(3)Use the statute of limitations matrix (Figure 1) as a guide.

  5. Written Plan. At the discretion of the RD, a written investigative plan, in the form of a memorandum to the supervisor, may be prepared. See Figure 2 for the format to use in preparing the investigative plan. Use Figure 3 as a guide in determining the elements to cover in the investigation.

  6. Initial Contact with Plan. ROs should exercise discretion in deciding to begin the investigation with a letter to the plan sponsor, sent by certified mail, return receipt requested, stating that the RO received a complaint from a participant or beneficiary and requesting an explanation for the actions taken against the complainant.(4)

    The letter should:

    1. Explain the provisions of Section 510;

    2. Discuss the nature of the alleged violation; and

    3. Request a written reply from the addressee within 14 days of receipt of the letter. A sample letter is set forth as Figure 4.

    In all contacts with the parties, the Investigator/Auditor should convey the Department's intention to resolve the matter fairly and in accordance with the provisions of ERISA.

  7. Scope of Investigation. The extent of the investigation depends upon the answer received from the plan administrator after the initial contact.

  8. Development of the Case. Some matters to consider in the development of Section 510 cases include:

    1. Establishing patterns of actions taken against employees in certain groups can often successfully prove discrimination.

      If several plan participants are terminated, all of whom are at an age nearing full vesting, while younger persons, less experienced and less productive, are kept on the payroll, discrimination to prevent attainment of a benefit right may be indicated. If the persons terminated include both those nearing a fully vested age and younger employees who have many years to go until full-vesting, discrimination may not be so apparent. However, establishing such a pattern may not be necessary in order to show a violation of Section 510, if other evidence is available.

    2. The Investigator/Auditor may need to prove there was no valid reason for the complainant's termination other than the Section 510 violation. This can be done through personnel and other records. Normally, an employer will deny the allegation that the employee’s termination was to prevent him/her from attaining a benefit. The company should be willing and able to prove that the complainant's work record or actions, or some other proper reason(s), were the basis for the discharge.

      If the stated reason for termination was that the employee's work record was poor, the Investigator/Auditor should question the reason for the employee’s retention for a number of years before termination. If he/she was sufficiently capable to be retained on the job until he/she was nearly vested, determine why his/her work suddenly deteriorated if, in fact, it did.

  9. Allegations Involving Other Case Types. If information received or developed indicates possible ERISA violations unrelated to the current issue, open a separate case, as appropriate.

    If the investigation develops sufficient evidence to make a preliminary determination that matters being investigated may also constitute violations of Title 18 or ERISA Section 511, the investigation of the criminal aspects will be discontinued and a referral will be made pursuant to the Criminal Investigations section of this Manual.

  10. Violations. When the investigation does not uncover any violations, prepare a closing ROI (Figure 5). If the RD concurs, send a pattern closing letter (Figure 6) and advise the complainant of the final decision.

  11. Compliance Achieved. When there are apparent violations, the RO if appropriate, will attempt to obtain voluntary compliance from the plan officials. See the Voluntary Compliance section for further details.

    In cases where discrimination is apparent and the plan sponsor acknowledges that it may have acted improperly and is willing to correct the situation, the Investigator/Auditor must carefully consider whether the proposed correction complies with ERISA.

    For example, the plan administrator may not grant a right, such as a vested interest, to a terminated participant unless that right was earned. If the plan administrator were to do that, that action would violate the fiduciary requirement that a plan administrator must operate the plan strictly in accordance with the plan provisions.

    The corrective action in this type of case can become extremely complex, especially when a plan sponsor is willing to take some steps necessary voluntarily to correct a discrimination situation, but is not willing to take all the necessary steps.

    If there is voluntary compliance, the Investigator/Auditor will prepare a Closing Report of Investigation including documentation of the manner in which the plan corrected the violation.

    Although participant's rights cases may be resolved through voluntary compliance, EBSA is not required to seek voluntary compliance in all cases.

  12. Noncompliance - Legal Action Not Warranted. In cases where a settlement offer is made that is either not acceptable to the complainant(s) or would not result in full compliance with ERISA, seek advice from OE. If legal action does not appear warranted, the Investigator/Auditor will prepare a Closing Report of Investigation and, after approval by the RD, the RO will advise the complainant of the final decision in the matter.

  13. Noncompliance - Legal Action Warranted. In cases where a settlement offer is made that is either not acceptable to the complainant(s) or would not result in full compliance with ERISA, and legal action is believed to be warranted, the Investigator/Auditor will prepare an Action Report of Investigation (See Figure 7). The RO sends the Action Report of Investigation with a cover memorandum from the RD (Figure 8) to the RSOL. The RO also sends a copy of the cover memorandum and narrative portion of the Report of Investigation to OE.

Figure 1
Statute of Limitations Matrix

Participant Rights Cases
Issue(s) Date of Unlawful Practice Analogous State Statute Applicable Statute of Limitations Date
1.
2.
3.
4.

Figure 2
Memorandum Format for Participants’ Rights Case

Subject: (Same subject as on case opening form)

To: (Supervisor)

Investigative Plan for Subject Case

  1. Allegation - set forth the alleged violation.
  2. Planned Investigation - (Using Figure 3 as a guide, list the areas to be investigated.)
  3. Time - Estimate the number of workdays necessary to complete the investigation.

Approved:

____________________
Supervisor

____________________
Date

Figure 3
Investigative Guide
ERISA Section 510

  1. Name of employee
  2. Address
  3. Phone Number

Employment History

  1. Period of service for the company. (If possible give data under next heading for each job.)
  2. Job at the time of alleged discrimination.
    1. Duties
    2. Department
    3. Immediate Supervisor
    4. Length of service
    5. Wage rate
  3. Efficiency
    1. Expressions from company
    2. Statements
    3. Wage increases
    4. Other evidence
  4. Seniority as compared to other employees in same category

Circumstances of Discharge or Other Adverse Action

  1. Timing
  2. Circumstances leading up to the discharge
  3. Complaints or warnings before discharge
  4. Circumstances surrounding discharge
    1. Complete story
    2. Whether manner of discharge was in line with customary practice
  5. Reason given by company at time of discharge--state who gave reason and when.

Lack of work

  1. Whether force was being reduced.
  2. Number of other employees who were similarly discharged.
  3. Name, dates, and reasons given for discharge.
  4. Proportion of union and non-union employees discharged.
  5. Method used to determine who was discharged.
  6. Whether method was in line with usual practice.
  7. Whether others were uniformly affected for similar cause.
    1. Names, positions and dates
    2. Whether the practice was the same prior to the time of alleged discrimination
  8. Whether company plans to recall these employees.

Status of Replacement

  1. Identity
    1. Name
    2. Address
    3. Phone Number
  2. Other status
    1. Experience
    2. Length of service
    3. Rating with company

Evidence to Show Motive of Company

  1. Threats before discrimination
  2. Explanations after

Steps Taken After Discrimination

  1. Application to have company reconsider
  2. Grievance machinery
  3. Agreement to arbitrate
  4. Satisfaction or waiver

Inefficiency

Insubordination

Violation of Rules

Figure 4
Format for Initial Letter
Participant’s Rights

Certified Mail - Return Receipt Requested

October 14, 2005

Mr. John H. Lewis
Director, Benefit Plans and Personnel Policies
ABC Company
123 Main Street
Kansas City, Missouri 64106

Dear Mr. Lewis:

Mr. Elmo Jones, a former employee of your company, lodged a complaint with this office alleging that recent action was taken with respect to his employment for the purpose of interfering with a right to which he may become entitled under the provisions of the ABC Company Retirement Plan. If true, such action would constitute a violation of section 510 of the Employee Retirement Income Security Act of 1974 (ERISA).

Briefly, section 510 of ERISA provides that it shall be unlawful for any person to discharge, fine, suspend, expel, discipline, or discriminate against a participant or beneficiary of an employee benefit plan for the purpose of interfering with the attainment of any right to which such participant may become entitled under an employee benefit plan, Title I of ERISA, or the Welfare and Pension Plans Disclosure Act.

In his complaint, Mr. Jones alleges that when he was terminated he was within five months of completion of sufficient years of participation under his retirement plan to reach retirement status. Mr. Jones furnished to us a copy of a letter to you, dated October 4, 2004, wherein he requested that he be considered for The Investigator/Auditor named below has been assigned to represent this office in this matter. You may contact him/her for additional information or assistance.

In his complaint, Mr. Jones alleges that when he was terminated he was within five months of completion of sufficient years of participation under his retirement plan to reach retirement status. Mr. Jones furnished to us a copy of a letter to you, dated October 4, 2004, wherein he requested that he be considered for other positions with the company so he would be able to complete the necessary years of participation. He also included a copy of a letter from you, dated October 29, 2004, denying his request. Mr. Jones contends that other employees with fewer years of service than he were given other positions within the company.

You are requested to furnish this office, within 14 days from your receipt of this letter, a written statement of your company's position with respect to Mr. Jones' complaint. You are free to include all pertinent facts relating to this matter.

The Investigator/Auditor named below has been assigned to represent this office in this matter. You may contact him/her for additional information or assistance.

Your cooperation in this matter will be appreciated.

Sincerely,

Joe Johnson
Regional Director

Figure 5
Report of Investigation
Participant Rights Case

Predication

State the reason for case opening.

Issues and Findings

  1. Allegation/Issue

    Cite the facts that show the allegations/issue was not a violation; or in cases where violations were substantiated, cite the facts to show voluntary compliance was achieved or that other dispositive action was taken.

  2. Allegation/Issue (Repeat as above for each allegation/issue)

Other Findings

Use this section to present facts or any other investigative activity not previously mentioned.

Figure 6
Sample Pattern Closing Letter
No ERISA Violations Detected

Dear (Plan Administrator/Fiduciary):

We have completed an inquiry involving entitlement of (name of complainant) to a benefit from (name of plan) pursuant to the Employee Retirement Income Security Act of 1974 (ERISA).

We have concluded our inquiry and no further action on this matter is contemplated at this time. (We appreciate the cooperation you and members of your staff extended to us.)

Sincerely,
Regional Director

Enclosure: SBREFA Notice

Figure 7
Participant Rights Case
Report of Investigation

Predication

State the reason for case opening.

Potential Jurisdictional Problems

If no jurisdictional problems are anticipated, enter “None.” If any are known, set forth the facts to identify them and document jurisdiction under Section ____________________. Any issue or potential defense relating to whether the plan is covered under ERISA should be set forth in this section.

Background

Include information, as appropriate.

Issues and Findings

  1. Allegation/Issue

    Cite the facts that show the allegations/issue was a violation.

  2. Allegation/Issue (Repeat as above for each allegation/issue).

Other Findings

Use this section to present facts or any other investigative activity not previously mentioned.

Exhibits

All significant facts presented in the report should be supported with exhibit citations. The following procedure should be used in submitting exhibits:

  1. State the name of the individual who is the subject of an RI or signed statement and the date of the interview.

  2. Documents, schedules, etc., should be precisely identified.

  3. Each supporting document should be a separate exhibit.

  4. Multiple page exhibits should be numbered.

  5. Exhibits should be identified by number.

  6. All copies must be legible.

  7. All plan documents (trust agreements, etc.) must be included as exhibits.

List of Documents and Workpapers Available in Regional Office but Not Used as Exhibits

List documents, schedules, Report of Interviews, and other materials in the Regional Office file that were not included as exhibits. Identify the date of each document.

Figure 8
Format for the Regional Director’s Cover Memo to an Action Report

To: Regional Solicitor

From: Regional Director

Subject:

Name of Plan
EIN
Case File No.

The following must be included in the body of the memo:

  1. Give a brief synopsis of the violations.

  2. Each violation must be supported by appropriate references to the regulations, interpretive bulletins, exemptions, variances, policy statements, previous no decisions involving similar cases, and any other authoritative references which would tend to establish the existence of the violation.

  3. When appropriate, outline the Regional Office’s efforts to obtain voluntary compliance.

  4. State the position of the violator(s) and other responsible plan officials with respect to each violation.

  5. Discuss the Regional Director’s recommendations for the final disposition of the case. If a partial settlement offer has been made the Regional Director should comment on its acceptability.

cc: File

Footnotes

  1. See 29 USC Section 1140.
  2. The fact that the complainant is not familiar with plan provisions does not necessarily mean the complaint is not valid. The lack of knowledge may be due to a failure by the plan administrator to provide proper disclosure.
  3. Because ERISA Section 413 governs limitations on actions brought under Part 4 of Title I, its 3- and 6-year limitations are inapplicable to Section 510 violations. Among the circuit courts, the analogous state laws appear to be “wrongful termination” or “retaliatory discharge.”
  4. Alternatively, a RO may decide to preserve the identity of the complainant and issue a general initial contact letter.