Case Development and Limited Review Investigations

Purpose. This section provides guidance for using case development techniques and handling limited review investigations relating to employee benefit plans.
Case Development. Case Development is the process of combining intelligence, planning, and operations in order to analyze, identify, develop, validate, assess, and prioritize cases for investigation. EBSA’s case development seeks to direct limited resources toward those plans and service providers with the highest potential for abuse in a manner consistent with agency goals, objectives, and priorities.
1. Criteria. Enforcement strategies, annual operating plans, industry trends, and national policy statements will provide direction for case development efforts to initiate the investigation of:
  1. Financial institutions
  2. Insurance carriers
  3. Service providers
  4. Specific sizes and types of plans
  5. Types of benefits
  6. Types of investments
  7. Individuals
  8. Other specific matters
  Additionally, regionally initiated case development should reflect plan demographic factors, like local economic conditions, geographical coverage, and specialized industries or plan types and sizes.
2. Sources. Sources for case development potential investigations may include:
  1. Computer-generated compilations of selected employee benefit plans or service providers derived from reports filed with EBSA.
  2. Information derived from detailed review and analysis of annual reports, supporting financial statements, schedules, exemption application files, ERISA Section 502 complaints, and other internal EBSA sources.
  3. Information concerning employee benefit plans or service providers referred by other governmental agencies such as the IRS, the SEC, other financial regulatory agencies, HHS, and the state insurance agencies.
  4. Information concerning employee benefit plans or service providers obtained from non-governmental sources such as newspapers, private litigation, industry journals and magazines, websites, social media, public and commercial databases, or leads from knowledgeable parties.
  5. Information and leads of potential systemic violations from participants, fiduciaries, informants, or other sources in the employee benefit plan community. These potential leads do not include allegations of acts against a participant or beneficiary for exercising any right to which they are entitled under the provisions of an employee benefit plan, or interfering with the attainment of any right to which the participant may become entitled, which should be handled as described in Participant Rights.
  6. Compilations of selected employee benefit plans or service providers derived by using combinations of the sources listed in (i.) through (v.) above.
3. Case Development Opening. The Regional Office (RO) will open a Case Development record as a Program 0. The opening should briefly describe the reason(s) for opening the record, any materials reviewed before opening the record, and the dates of such review.
4. Records for Case Development. For all activities conducted during case development, such as telephone calls, internet/database searches, etc., the RO must maintain a record in the case development record (Program 0). The record for each entity shall include:
  1. Date of contact/search;
  2. Name of party contacted/searched;
  3. Name of database searched;
  4. Summary of what occurred;
  5. Any action taken by the RO (i.e., no action taken, case opened, etc.); and
  6. Sufficient back-up documentation (e.g., annual reports, financial statements, correspondence) to allow for a subsequent statute of limitations analysis.
5. Disposition. If case development efforts indicate that a violation may exist, then the RO should open a full-scope investigation.
  If, however, case development leaves open a threshold question or issue that must be resolved before determining whether a violation exists, then the RO may open a limited review investigation (Program 77).
  At the case development stage, the RO makes no commitment under ERISA Section 504 to conduct a limited review and/or full-scope investigation.

Limited Review Investigations. Limited review investigations are expedited inquiries into one or more specific issues, features, or aspects of a plan, service provider operations, and/or an individual to determine whether a potential violation exists and whether to further investigate or close the matter.

Scope. A limited review investigation is appropriate when an initial lead or complaint is unclear or not adequately supported, or when case development presents an issue that needs further explanation. ROs should only open limited review investigations to determine whether a particular activity, transaction, or specific potential violation occurred. ROs are not required to examine every aspect of plan or service provider operations, only those matters that formed the basis for the limited review opening.
Opening Limited Review Investigations. The RO will open a limited review investigation as a Program 77. The opening narrative should briefly describe the reason for the limited review opening. The summary should contain:
1. A description of the pertinent facts that form the basis for opening an investigation, including an explanation of the issue that needs clarification; and
2. The results of the case opening vetting procedures, including the search of global indices.
Investigators/Auditors should maintain any materials reviewed before opening the case in the case file.
Information Requests & Fact Gathering. Once the RO opens a limited review investigation, activities to obtain information include:
1. Background searches;
2. Initial document requests (or subpoenas) to get information relating to the specific issue, feature or aspect; and
3. Interviews to get additional information relating to the specific issue, feature or aspect.
Information obtained by document requests and interviews will be used to determine whether a full-scope investigation is merited. See Figure 1 for an example of a document request letter/limited review opening letter.

Limited Review Investigation Dispositions. Limited review investigations should have no results. Limited review investigations must be either closed or converted using the following dispositions:

Disposition	Actions	More Info
No Violation(s) Found	Prepare a closing ROI describing the basis for the review, the issues and documents reviewed, the individuals interviewed, and why EBSA found no violations exist and/or the reason for no further investigation. Inform appropriate plan or service provider officials in a letter.	Form 203D Form Form 203E Form 203F Form 203G Figure 2
Potential Violations Found	Notify your supervisor. The RO will consider converting the investigation to a retirement, health, or welfare investigation, in accordance with case management requirements.	Refer to EM sections on Fiduciary/Health Investigations.
Potential Criminal Violations Found	Inform your supervisor as soon as possible after uncovering evidence of possible criminal violation(s). The civil case will proceed. The RD will decide whether and who will conduct a criminal investigation.	Refer to EM section on Criminal Investigations Program.
Potential Violations of Participant Rights	If the review uncovers possible ERISA Section 510 violations involving acts against a participant or beneficiary for exercising any right to which they are entitled under the provisions of an employee benefit plan, or interfering with the attainment of any right to which the participant may become entitled, convert the case to a Participant Rights investigation.	ERISA Section 510 and the EM section on Participant Rights.
Prohibited Persons	If the review indicates that a person barred from serving as an employee benefit plan fiduciary or service provider following a criminal conviction is acting in such a capacity, convert the case to a Prohibited Persons investigation.	ERISA Section 411 and EM section on Prohibited Persons.

Statute Control Date Analysis. Investigators/Auditors must review all received and requested documents to complete a statute analysis for all potential issues and document it in EBSA’s database.
General Investigative Considerations under Limited Review Investigations. Generally, the Department of Labor will not inform plan officials or others of the basis for its investigation except to state that the purpose of the limited review is to determine whether a violation of Title I of ERISA occurred or is about to occur. The RO should follow normal operating requirements, as reflected elsewhere in the Manual, for conducting and documenting interviews, receiving and maintaining records, and similar functions. However, the scope of records reviewed, interviews conducted, and third-party verifications made may be less under limited review investigations than under full-scope investigations.
SBREFA Notice. ROs must provide SBREFA information to all plan sponsors, plans, or plan service providers with less than 100 participants or employees during the course of a Title I of ERISA civil investigations. See EM section on Voluntary Compliance Guidelines for more information.

(Figure 1)
P-77 Opening Letter

Month DD, YYYY

Plan Administrator
XYZ Corporation
234 N. Fairfield Street
Somewhere, Illinois 12345

Re: XYZ Plan

Dear (Plan Administrator/Fiduciary):

We are conducting a limited investigation of (XYZ plan) to determine whether it complies with Title I of the Employee Retirement Income Security Act (ERISA). [If applicable: This is part of a broader inquiry of selected private employee benefit plans.] Please send copies of the materials listed below to: [EBSA field office address] within the next 15 days.

The requested items are: [list as appropriate] 1.

If you have any questions, please call Investigator/Auditor [Inv/Aud Name] at 200-321-1234 or write to the above address.

Thank you in advance for your cooperation.

Sincerely,
[Investigator/Auditor]
Regional Office

Enclosure (SBREFA Pamphlet)

(Figure 2)
P-77 Closing Letter – No Violations Detected

Month DD, YYYY

Plan Administrator
XYZ Corporation
234 N. Fairfield Street
Somewhere, Illinois 12345

Re:

XYZ Plan
Case Number

Dear (Plan Administrator/Fiduciary):

We concluded our limited investigation into XXX under the Employee Retirement Income Security Act (ERISA). Based on the information we’ve reviewed to date, we determined that XXX. We plan no further action at this time.

Please note that resolving this matter is limited to the specific issues reviewed in this investigation of the Plan. Our findings or absence of findings, including the absence of findings regarding any specific provision of the Plan, shall not bind the Department in:

reviewing or investigating any other employee benefit plan or service provider, or
any subsequent Plan review regarding issues not raised by this investigation.

Our decision is binding on the Department only. It does not prevent another individual or governmental agency from taking action.

Thank you for your cooperation.

Sincerely,
Regional Director

Enclosure: SBREFA Notice

Case Development and Limited Review Investigations

(Figure 1)
P-77 Opening Letter

(Figure 2)
P-77 Closing Letter – No Violations Detected

(Figure 3)
Form 203d – ROI P77 (except Health Plans)

(Figure 4)
Form 203e – ROI P77 Financial Institutions

(Figure 5)
Form 203f – ROI P77 Service Providers

(Figure 6)
Form 203g – ROI P77 Health Plans

Case Development and Limited Review Investigations

(Figure 1)P-77 Opening Letter

(Figure 2)P-77 Closing Letter – No Violations Detected

(Figure 3)Form 203d – ROI P77 (except Health Plans)

(Figure 4)Form 203e – ROI P77 Financial Institutions

(Figure 5)Form 203f – ROI P77 Service Providers

(Figure 6)Form 203g – ROI P77 Health Plans

(Figure 1)
P-77 Opening Letter

(Figure 2)
P-77 Closing Letter – No Violations Detected

(Figure 3)
Form 203d – ROI P77 (except Health Plans)

(Figure 4)
Form 203e – ROI P77 Financial Institutions

(Figure 5)
Form 203f – ROI P77 Service Providers

(Figure 6)
Form 203g – ROI P77 Health Plans