Blogging Employee Benefits

February 3, 2006

DOL Investigating Potential Conflicts of Interest in Pension Consulting

Filed under: DOL — Fuguerre @ 2:35 pm

“I urge the Department of Labor to move swiftly to investigate and remove pension consultants who are jeopardizing workers’ retirement security through conflicts of interest, kickbacks, and self-interested fees,” Rep. Miller said.

The Department of Labor is investigating potential conflicts of interest in pension consulting, according to correspondence from the agency to Reps. Ed Markey and George Miller. [DOL Correspondence, Ann Combs, 2/1/06; Announcement on Rep. Markey’s Website, 2/3/06] DOL is also reviewing existing regulations relating to disclosure of fees by service providers to employee benefit plans, including those under revenue sharing arrangements.

At the same time, the DOL correspondence appeared to exercise a fair degree of effort to carefully limit the scope of its oversight exclusively to ERISA fiduciaries or parties in interest. Moreover, the DOL seemed to dodge a related request from the representatives to take action in the disputes surrounding pension plans that had been sponsored by United Airlines.

Behind the exchange between the representatives and the Labor Department is an on-going SEC staff investigation into potential conflicts of interest in pension consulting. [Staff Report Concerning Examinations of Select Pension Consultants, 5/16/05; Conflicts of Interest in Pension Consulting: An Update on the SEC’s Examinations, Lori Richards, 12/5/05] See Grenier’s Benefitsblog (1/23/06) for further reading on the issue.

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