Regulators and Audits
It's about preparation and process
DOL 401(k) Plan Investigations
Sample DOL Investigation Initiation Letter
For Your Fiduciary Tool Belt
Month DD, YYYY
Plan Administrator XYZ Corporation
234 N. Fairfield Street
Somewhere, Illinois 12345
Re: XYZ Plan
Dear Sir:
As you know, our office will be reviewing XYZ Plan for compliance with Title I of the Employee Retirement Income Security Act (ERISA), which establishes standards governing the operation of employee benefit plans such as XYZ Plan.
Submitting relevant documents to our office before the on-site field investigation begins, can help to:
- increase the speed of the process,
- reduce the administrative burden for plan and corporate officials, and
- (in some cases) eliminate the need for an on-site visit entirely.
Please submit to this office by DATE OF LETTER + 10 WORKING DAYS the documents indicated on the checklist below for the XYZ plan. You can also send the documents electronically to: [INVESTIGATOR NAME]@dol.gov.
Thank you for your cooperation. If you have any questions, please contact Investigator/Auditor ______________________________ at 200-321-1234.
Sincerely,
Please Submit Copies of the Items Listed Below:
DOL 401(k) Plan Investigation Document Request List
For Your Fiduciary Tool Belt
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You can see in the letter above, you will have 10 business days to provide the requested documents.
Tips:
- Sending the documents to the investigator directly is less disruptive that an on-site investigation.
- If your cannot meet the deadline, contact the DOL agent and request an extension of time.
- Consider offering to produce some of the documents in advance of the initial deadline as a good faith gesture.
- Appoint an internal “point person” who is responsible for gathering all of the documents and information.
- Only produce what the DOL requests and be prepared for follow-up requests.
- Ensure that you get some type of delivery confirmation or return receipt.
§408(b)(2) Fee Disclosure Review Worksheet
For Your Fiduciary Tool Belt
A practical worksheet to help retirement plan fiduciaries review service provider fee disclosures and document their oversight process.
Why §408(b)(2) Fee Reviews Matter
Under ERISA Section 408(b)(2), retirement plan service providers must disclose important information about their services, compensation, and potential conflicts of interest.
These disclosures are designed to help plan fiduciaries determine whether the fees paid by the plan are reasonable relative to the services provided.
Because retirement plan fiduciaries have a duty to monitor service providers and ensure fees remain reasonable, reviewing §408(b)(2) disclosures is an important part of maintaining a prudent fiduciary process.
Conducting and documenting these reviews helps plan committees demonstrate active oversight and thoughtful evaluation of plan expenses.
What This Worksheet Helps You Do
This §408(b)(2) Fee Disclosure Review Worksheet provides a structured checklist to assist retirement plan fiduciaries when reviewing service provider disclosures.
The worksheet helps committees evaluate:
• services provided to the retirement plan
• direct and indirect compensation paid to service providers
• revenue-sharing arrangements and other compensation sources
• potential conflicts of interest
• clarity and completeness of disclosure information
• documentation of fiduciary review and decision-making
The worksheet also provides a format for documenting the review process, which is an important component of demonstrating fiduciary diligence under ERISA.
§404(a)(5) Participant Fee Disclosure Review Worksheet
For Your Fiduciary Tool Belt
A practical worksheet to help plan fiduciaries review and document participant fee disclosures.
Why Participant Fee Disclosure Reviews Matter
Under ERISA Section 404(a)(5), retirement plans that allow participants to direct their own investments must provide clear disclosures about plan fees, expenses, and investment information.
These disclosures help participants understand:
• the costs associated with participating in the plan
• the fees charged by service providers
• the expenses associated with each investment option
Plan fiduciaries are responsible for ensuring these disclosures are provided and that the information remains accurate, complete, and understandable.
Conducting a periodic review of participant fee disclosures is an important part of maintaining a prudent fiduciary process.
What This Worksheet Helps You Do
This Participant Fee Disclosure Review Worksheet provides a structured checklist to help plan fiduciaries evaluate whether required disclosures are being delivered properly.
The worksheet helps committees review:
• timing of participant fee disclosures
• completeness of required information
• accuracy of investment-related information
• explanation of administrative and individual fees
• accessibility of disclosure materials to participants
• documentation of the review process
The worksheet also helps retirement plan committees maintain written documentation of their oversight, which is an important part of demonstrating fiduciary diligence.
IRS 401(k) Plan Examinations
What you need to know
For Your Fiduciary Tool Belt
The IRS wants your plan to stay qualified and has established a program to fix the most common errors they see. In fact they have three correction programs.
Self-Correction Program (SCP)
Many mistakes in operating your retirement plan can be self-corrected without filing a form with the IRS or paying a fee. Eligible operational failures include:
- failure to follow the terms of the plan
- excluding eligible participants
- not making contributions promised under the plan terms
- loan failures
Voluntary Correction Program (VCP)
A tax-favored retirement plan (401(k) or other qualified plan, 403(b), SEP or SIMPLE IRA) generally loses its tax-favored status if “failures” occur. Examples of failures are situations where the plan sponsor fails to take certain actions, which include:
- Maintaining a valid, up-to-date plan document.
- Following the terms of the plan document while operating the plan.
- Complying with federal tax law requirements while operating the plan.
VCP helps by allowing you to:
- Obtain a written agreement, called a compliance statement, showing that the IRS approved your proposed correction method.
- Bring your retirement plan back into compliance with federal tax law.
- Provide the benefits communicated to your employees in your written plan document.
- Protect your tax deductions.
- Ensure that participants’ retirement savings continue to accumulate tax-deferred.
- Avoid unfavorable tax consequences that would normally result from the disclosed failures (if you complete all corrective actions described in the compliance statement by the stated deadlines).
- Avoid paying the larger closing agreement sanctions that would apply if an IRS audit or determination letter application review discovers the failures.
- Request relief from certain federal income or excise taxes associated with certain plan errors.
Audit Closing Agreement Program (Audit CAP)
A plan sponsor that does not come forward to the IRS, but whose retirement plan has significant problems that are discovered by the IRS on examination or during the determination letter application process, is entitled to correct significant mistakes under Audit CAP to preserve the tax benefits associated with properly maintained retirement plans.
Generally, under Audit CAP, the plan sponsor or the plan is under examination and the plan sponsor:
- Corrects significant mistakes in the plan
- Enters into a Closing Agreement with the IRS
- Pays a sanction negotiated with the IRS taxes associated with certain plan errors.
Annual Audits: The "No-Panic" Survival Guide
Let’s be real: Nobody wakes up excited for a 401(k) audit. Between the Department of Labor (DOL) and the IRS, the regulatory side of retirement planning can feel like a maze designed by someone who really loves paperwork.
But here’s the secret: Audits aren't just a hurdle; they’re a safety net for your business. And when you have the right map, the maze is actually pretty manageable.
Meet Your Audit Ally: Weaver
We don’t just point you toward regulators; we point you toward the best in the business. We partner with Theresa McDowell and the team at Weaver (one of the top 25 audit firms in the U.S.) to ensure our clients have access to institutional-grade expertise.
Theresa is a Denver-based CPA and Army veteran who specializes in helping plans stay ERISA-compliant without the usual headaches. She’s the friend you want in your corner when the DOL comes knocking.
The Audit Essentials (aka Your Homework)
If your plan has 100+ participants, you’re likely in "Large Plan" territory, which means an annual audit is mandatory. To make this as painless as possible, Theresa and the Weaver team put together the ultimate prep guide.
- Download: The Annual Audit Prep Guide (PDF)
- What’s inside: A step-by-step checklist of every document you’ll need (from payroll registers to fidelity bonds) and tips on how to avoid the most common "red flags."
Listen & Learn: The ERISA Auditor Podcast
Prefer to learn while you commute? Check out this deep dive into what auditors actually look for. It’s straight talk from the experts—no fluff, just facts.
Why We Care About the "Boring" Stuff
At Castle Rock PEP, we handle the heavy lifting of compliance so you don’t have to. By pooling multiple employers into one plan, we eliminate the need for individual audits for most businesses—saving you an average of $15,000 to $20,000 a year.
But even if you’re not in a PEP yet, staying compliant is about protecting your people (and your personal liability). We’re here to make sure you’re always "audit-ready" without losing your mind.