Uganda B. Kenya

My now deceased brother was fond of saying "Uganda B. Kenya" as a replacement for you gotta be kidding me.  Well some things have a way of sticking in one's brain and this has for me.  Jeff in the office next to me told me about a new Department of Labor (DOL) initiative where my brother's saying was invoked. 

Jeff mentioned that the DOL was hiring 1000 new employees to audit company sponsored retirement plans.  The reason for the new hires is because previous audits have produced $1,000,000,000 (that's one billion) in fines (that is revenue to the government).  The average fine was $450,000.  One conclusion was that there were only a couple of bad guys and that most errors were of an administrative nature. 



So--if I get this right then--well intentioned businesses start a retirement plan to assist employees to save money for their retirement.  They spent real money and time to do this and now are fined for an administrative error.  The FINE money goes entirely to a governmental entity NOT the employer trying to do the right thing or the participants who supposedly were damaged by the error.   You with me yet--UGANDA B. KENYA!

A few years ago I was on the phone with the head of auditing for the DOL in Fort Worth.  I was asking about a requirement that was causing a small employer to have an annual audit that cost about $5,000.  The head auditor said--"I think all plans should be required to have and audit every year."  To which I replied--"Ma'am, no disrespect, but you are the complaint department and all you hear about are the problems.  What about the 98% of plans that do the right thing?"  To which she said--"Well I'm an auditor and I am not going to change my mind." 

I wonder how we could have a retirement system that encourages more people to put in more money instead of being penalized for trying to do the right thing?  The complexity, constant change, and ambiguity is a giant disincentive to want to implement a retirement plan for many businesses. 

There has to be a way!!!