Pension Auditing

The Pension Protection Act has ushered in an ever-increasing breadth of investment options for plans. Hemming Morse’s team possesses the dedicated experience required to analyze these options and ensure compliance with fair market valuations. Along with an increase in investment options, the volume of investment managers’ and professionals’ fees has multiplied. We have developed a keen eye for testing these types of fees, ensuring accordance with the appropriate contracts and putting our clients at ease. Our ability to adapt to changing market conditions and evolving client needs has also led us to develop a streamlined process for collecting the necessary data for Form 5500 compliance-related issues.

Representative Matters

Investigation of Trustee Due Diligence

Hemming Morse analyzes trustee investments and payments to determine reasonableness.

Hemming Morse was engaged to provide a detailed analysis of the due diligence of a client’s plan’s trustees in regard to the reasonableness of certain investments and fees. Specifically, the team obtained and reviewed extensive data on industry standards to determine the appropriateness of a single real estate investment representing 80 percent of the fund’s total net assets. This also included identifying hidden payments to a party-in-interest, as well as analysis of the reasonableness of the administrator’s fees relative to those of other trust funds similar in size and complexity.

Cost Allocation Analyses

Hemming Morse ensures DOL compliance for pension plan allocations.

Many of our clients’ plans are administered by salaried administrators or host pension plans with administrative costs allocated to various, related trust funds based on an allocation methodology. The Hemming Morse team performs analyses of these client allocations and provides suggestions to help ensure compliance with Department of Labor guidelines. Often, this involves analysis of employee time studies and facilities/assets usage to determine appropriate allocations. We also regularly perform similar studies to determine appropriate fees charged by unions for administrative support functions.

Determination of Employee Hardship

Hemming Morse investigates employer claims of financial hardship and exposes inappropriate use of company assets.

Hemming Morse is routinely engaged to make determinations regarding claims of financial hardship by employers that allege they cannot pay contributions owed to an employee benefit plan. Our detailed review includes determining the ability to pay contributions with existing assets and the extent of misappropriations of financial status, if any. In one particularly noteworthy case, Hemming Morse’s investigation revealed that an employer was using a personal boat as a business asset and, further, was building a hotel for a family member using company assets and supplies.