DOL currently investigating 3M's pension plan, company reveals
- 3M announced a U.S. Department of Labor investigation into its pension plan, reports The Star Tribune. The company revealed the probe, which apparently has been ongoing since April 2015, in a Securities and Exchange Commission filing May 3.
- According to The Star Tribune, the DOL is pursuing the investigation under the federal Employee Retirement Income Security Act of 1974 (ERISA). Under scrutiny are 3M’s securities lending, plan expenses, private equity investments and plan-benefits distributions.
- Based on the company’s 2016 annual report, the pension plan is worth about $19.7 billion, The Star Tribute said. 3M previously ran into issues with its plan when a limited partnership with WG Trading became the subject of a criminal investigation in 2009. One of the plan's investments, Panda Temple Power, went bankrupt in April, the report said.
Details on any alleged violations of the law aren’t described here. The company, understandably, isn’t revealing any details either. But the DOL is conducting its probe under ERISA, which signals some concern about how the company’s pension plan was administered and whether plan protections were jeopardized.
3M is one of a dwindling number of companies that still offers pension plans. Employers have been switching to defined contribution plans in substantial numbers in the past few decades.
ERISA is a 40-plus-year-old law with amendments. Every private employer that offers retirement, health and other benefit plans must know and comply with its provisions. Observers at Willis Towers Watson, in the firm's latest advice for defined benefits plan providers, advise employers to monitor their plans with investment software tools.
Company investments are a less noisy, but a very high impact space for HR pros to pay attention to, especially given employee overconfidence about retirement planning.