May 8, 1990
TO: PENSION COMMITTEE NO. 12-90
RE: DEPARTMENT OF LABOR ERISA ENFORCEMENT PROPOSALS
__________________________________________________________
Attached is a copy of the Department of Labor's ERISA
enforcement proposals which it recently delivered to the House of
Representatives in response to criticism of the Department's
ERISA enforcement activities.
Among the recommendations contained in the package is a
proposal to eliminate the "limited scope" audit exemption
contained in Section 103(a)(3)(C) of ERISA. This exemption
allows plan administrators to exclude assets which are held by
regulated financial institutions from the scope of the required
annual financial audit. In its place, the Department proposes to
require financial institutions holding retirement plan assets to
instruct their independent auditors to prepare a special report
which covers internal accounting controls and similar matters.
The report would also contain an opinion by the auditor on the
financial statements provided to retirement plans.
In the next several weeks, members of the Institute staff
will meet with Department of Labor officials to discuss the
Department's long-term strategies and goals concerning ERISA
enforcement. Please contact the undersigned as soon as practical
if you have any comments on or criticisms of the attached
proposals so that we can raise them with the Department of Labor.
In particular, please consider the costs involved if the
Department's proposal regarding the limited scope audit exemption
is implemented.
We will keep you informed of further developments.
W. Richard Mason
Assistant General Counsel
Attachment
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