| Dear Center Members: |
This alert includes information about two new Center tools:
- "Topix" primer, Definition of Compensation in an Employee Benefit Plan
- Summary of DOL criminal enforcement cases involving EBPs
|
|
EBPAQC "Topix" Primer on Definition of Compensation in an Employee Benefit Plan
The Center has issued a new "Topix" Primer, Definition of Compensation in an Employee Benefit Plan, to provide members with a basic understanding of the various definitions of compensation that may be used in an employee benefit plan, and how those definitions are relevant to a plan's operations and the determination of the plan's tax qualification status. This primer provides an overview of compensation in employee benefit plans; information about the various components of compensation; and compensation definitions used in plan documents and for a plan's tax qualification status; and includes a comparison of the various Internal Revenue Code (IRC) safe harbor compensation definitions. Click here to read or download the primer.
This primer is the most recent addition to the EBPAQC's "Topix" primer series. The primers are intended to provide a basic overview of EBP-specific topics. They can be used to educate staff in formal or informal training, and they also may be shared with clients to help them better understand their plans. Other primers, which also are available on the EBPAQC website, include: Health and Welfare Employee Benefit Plans, Employee Stock Ownership Plans; Master Trusts In Employee Benefit Plans; Multiemployer Employee Benefit Plans; Multiple Employer Retirement Plans and Multiple Employer Welfare Arrangements; Tax and Compliance Issues for 401(k) Plans; Insurance Company Products Offered to Employee Benefit Plans; Plan Investments in Bank Collective Investment Funds; 403(b) Plans; Alternative Investments in Employee Benefit Plans; Cash Balance Plans; Limited Scope Audits; Plan Sponsor Subsidies Under the Medicare Prescription Drug, Improvement and Modernization Act of 2003; and Stable Value Funds and Investment Contracts — An Overview.
EBPAQC Summary of DOL Criminal Enforcement Cases Involving EBPs
The EBPAQC has prepared a summary of DOL's criminal enforcement cases involving employee benefit plans during the period October 2014 through November 2018 to assist members in their consideration of fraud in employee benefit plan financial statement audits. It will help you understand how fraud might be committed and concealed in a benefit plan, and may be useful in conducting fraud brainstorming sessions for your EBP audits. Click here for the summary.
This tool categorizes the cases into the following plan types: pension and 401(k) plans; medical, health and death benefit plans; multiemployer plans; and other plan types. Many of the DOL's criminal enforcement cases involve company owners, officers, trustees, bookkeepers, plan administrators and service providers. They generally involve smaller plans; however, these types of fraud can occur at plans of all sizes. Examples of fraud types noted in the summaries include the following:
Pension/401(k) Plans
- Embezzlement, fraud and theft
- Making materially false statements in the plan's annual report and fraudulent annual reports
- Altering participant account and contact information to improperly obtain distributions
Medical, Health and Death Benefit Plans
- Diversion of funds
- Making false statements related to healthcare and identity theft
- Defrauding money from individuals who purchased health care coverage
- Falsely billing for medical and dental work not performed
- Embezzlement from HRA account
- "Carving out" from self-funded plans those employees who had significant health risks, and then, through false statements, arranging for those employees to be insured through traditional health insurance providers
- Stealing from healthcare plans to pay for bonuses, operating expenses, luxury car leases, and a country club membership
Multiemployer Plans
- Embezzlement
- Improper union plan billing for medical services that were not provided or unnecessary
- Receiving unauthorized unemployment benefits
- Embezzlement from apprentice fund
- Filing a false tax return by failing to report income received from contractors hired to upgrade the plan's computer system
Other
- Ponzi scheme
- Identity theft
- Fraudulently conducting ERISA audits
- Defrauding investors
- Tax violations
- Conspiracy, wire fraud, theft from an employee benefit program, filing a false tax return, and money laundering
Additional public information about each case is available in the DOL EBSA's Criminal Enforcement News Releases |
Sincerely,
AICPA Employee Benefit Plan Audit Quality Center |
|
 |
|
| In This Alert |
|
| Additional Resources |
|
| Stay Informed |
We welcome any suggestions or questions - please send them by e-mail at EBPAQC@aicpa.org.
Members of the Employee Benefit Plan Audit Quality Center (EBPAQC) may only reproduce and distribute EBPAQC Alerts internally within the firm to other Center member firm personnel as part of the firms' professional services. For information about permission to copy any part of these documents for redistribution or inclusion in other work, please click on the copyright notice at the bottom of the page or phone the copyright permission hotline (919) 402-4031.
©2018 Association of International Certified Professional Accountants.
Online privacy policies and copyright information.
220 Leigh Farm Road, Durham, NC 27707-8110.
|
|
|
|
|
