Compliance Audits - ESOP Services | SG&F Law

Compliance Audits

The United States Department of Labor (DOL) is responsible for enforcing the fiduciary standards of ERISA and has made ESOP investigations a national priority for the DOL regional offices. The Internal Revenue Service (IRS) is responsible for the technical qualification of ESOPs, and audits plan sponsors on issues such as the deductibility of ESOP contributions and questions that arise from a review of the ESOP’s 5500 Annual Report filings.

SG&F attorneys are experienced in working with ESOP sponsors in DOL investigations and on IRS qualification issues and plan audits. When a DOL investigation begins, we can coordinate the client’s responses to the extensive requested plan documentation, participate in client interviews with the DOL investigator and review client communications with the DOL throughout the investigative process. If a fiduciary violation or violations are found and need to be corrected, we advise clients on their options and the most cost effective way to take the corrective actions necessary to obtain a “no action” closing letter.

We regularly apply for and obtain favorable determination letters from the IRS covering the adoption and termination of ESOPs. Our compliance team also monitors changes in the laws that affect ESOP plan documents and/or the administration of the plan and provides updates to our clients on such changes in the law. If needed, SG&F attorneys also counsel clients on plan compliance issues, including when self-correction is available for plan documents or other qualification failures, and when corrective action may be required under the IRS Employee Plans Compliance Resolution System (EPCRS). If an EPCRS filing should be required, we will prepare and file the application and represent the client throughout the correction process.

For help with compliance and audit issues, contact us for more information.


Compliance Audits | Corporate Governance | Creation & Operation | Mergers & Acquisitions | Termination | Transaction Structure & Implementation

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