Audit Alert: Are You Ready?


When plan participants make complaints, take them seriously from the beginning. In addition to the threat of an ERISA lawsuit, you could also find yourself getting a call from the Department of Labor (DOL) to schedule a plan audit. Are your ready for that?

 Getting Audited By The DOL

401k Specialist reports that the DOL could choose to investigate your company sponsored retirement plan for a variety of reasons. These include “a participant complaint that escalates to a case opening, information in Form 5500, bankruptcy or extreme financial distress, and targeting performed by the DOL regional offices.”

The call from the Department of Labor will go to the plan administrator listed on the Form 5500. Once you are called upon for an audit, you can likely expect to be involved for several months. A first step will be submitting a lot of documents—going back about three years. Examples of documents include:


  • plan document
  • summary plan description,
  • copies of Form 5500
  • IRS determination letter
  • documents showing the plan’s rate of return
  • quarterly investment reports
  • blackout notice (if applicable)
  • fidelity bond or fiduciary bond (if any)
  • payroll summaries showing the total employee contributions withheld for each pay period
  • trust statements showing each deposit made to the plan’s trust account date deposited
  • service agreements or contracts for each service provider (including TPA, auditors, financial/investment advisors, record keepers, etc.)
  • list showing plans investments


Compliance: ERISA Fidelity Bond

During several days of on-site interviews and more detailed analysis into the plan and its management, DOL auditors also typically use a “fidelity bond checklist” to make sure the ERISA fidelity bond meets the DOL requirements.

Remember, an ERISA fidelity bond is required by the Department of Labor to protect the assets of the retirement plan from theft. Let leading national ERISA bond provider, Colonial Surety Company, help you ensure compliance. Uniquely, Colonial includes retroactive ERISA fidelity bond coverage for years when the plan was not covered. Additionally, you can opt for cost-saving multi-year coverage and ensure your ERISA bond remains Department of Labor compliant for the life of its term.

Obtain ERISA Fidelity Bond Here Now.


Rising: ERISA Lawsuits

 In just one recent year, over 12,000 ERISA lawsuits were filed in U.S. District Courts, with small businesses increasingly targeted. Any individual involved in the management of a retirement plan can face personal exposure for breach of fiduciary. Consider how even the allegations of a fiduciary breach would divert attention and resources from your work—and life? Who will defend you? What will it cost? How will you pay?

Why wait? Don’t go it alone. At Colonial, along with your ERISA bond, as a plan sponsor, you can also affordably obtain fiduciary liability coverage. Importantly, this protects you—and your assets— from personal liability in the event of an alleged fiduciary breach. With Colonial’s package, the annual premium is less that what you would pay for even one hour with an expert ERISA lawyer.

Colonial can even help you round out your protection with cyber liability coverage. Expectations for plan fiduciaries continue to rise as the cybersecurity of retirement plan data and funds requires more and more attention. Colonial’s cyber liability insurance, included with ERISA packages, provides a smart, services-based solution to help plan sponsors successfully manage data breaches while minimizing liability for the company and plan.

Remember: the required ERISA bond protects the assets of the retirement plan from theft; Fiduciary Liability coverage protects you and your assets from personal liability; and, Cyber Liability coverage can safeguard your company and plan from covered losses and expenses in the event of a cyber breach.

With Colonial, you can easily and quickly secure your affordable coverage package today. Take a few minutes and do it now: Complete ERISA Bond Package.

Serving customers since 1930, Colonial Surety is the trusted source for the pension industry to secure legally required ERISA bonds, fiduciary liability insurance and cyber-liability insurance. We help safeguard plan sponsors, pension professionals and financial advisors – and keep their businesses compliant – with pain-free, efficient, and friendly service every time.

 Colonial Surety Company is rated “A Excellent” by A.M. Best Company, U.S. Treasury listed and in business all across the country.