EBSA Told to Take Further Action to Oversee Alternative Investments

The Office of the Inspector General (OIG) recently issued a report titled "EBSA Needs to Provide Additional Guidance and Oversight to ERISA Plans Holding Hard-to-Value Alternative Investments". The report states that:

"EBSA has made efforts to improve its oversight of plans that hold hard-to-value alternative investments. Despite these efforts, however, EBSA must take further action to increase protections for participants and beneficiaries of plans investing in these types of investments. We found EBSA had not formalized into regulatory guidance a requirement that plan administrators identify and adequately support the fair value of hard-to-value investments nor implemented the 2006, 2008, and 2011 ERISA council recommendations on the same. As a result, plans are using poor practices in valuing these investments. Almost no plan administrator in our samples obtained an independent valuation or demonstrated an analytical process to determine the fair value of all their hard-to-value assets."

The report is available here.