EBSA Common Interest Agreements: What Plan Sponsors Need to Know

Plan sponsors have extensive responsibilities under the Employee Retirement Income Security Act (ERISA). They must ensure timely contributions, monitor service providers, and maintain compliance. When potential issues arise, the Employee Benefits Security Administration (EBSA) may open an investigation to review plan operations and fiduciary practices. In some cases, the agency may collaborate with outside parties through a Common Interest Agreement (CIA). This legal arrangement allows EBSA to share investigatory materials with third parties, often without notifying the plan sponsor.

These agreements are not automatically triggered. They are used selectively, typically when a private attorney is preparing or pursuing legal action, and EBSA believes collaboration could support its enforcement goals. According to the Department of Labor, EBSA has entered into six agreements with private plaintiff firms since 2022. While uncommon, their potential impact makes them important for plan sponsors to be aware of. To help employers and benefit plan sponsors, JLK Rosenberger has summarized the key details below.

What Is a Common Interest Agreement?

A Common Interest Agreement allows EBSA to share nonpublic information gathered during an investigation with another party that shares a legal interest. The agreement outlines the scope of cooperation and protects legal privileges, such as confidentiality and attorney work product.

CIAs are not standard procedure. They are used when EBSA and the third party believe that cooperation will help enforce ERISA, most often in situations where a civil lawsuit is already underway or being developed. These agreements are reviewed and approved by the agency.

Who This Applies To

Not every employer-sponsored benefit plan falls under ERISA, but many do. Plan sponsors offering qualified retirement plans or group health benefits to employees are generally subject to ERISA rules and EBSA oversight.

Plans Generally Subject to ERISA:

• 401(k) plans
• 403(b) plans sponsored by private nonprofit employers
• Defined benefit pension plans
• Profit-sharing and money purchase plans
• Group health, dental, and vision plans
• Disability, life insurance, and other welfare benefit plans

Plans Not subject to ERISA:

• Government plans (federal, state, or local)
• Church plans, unless the organization has opted in voluntarily
• SIMPLE IRAs and SEP IRAs, which are funded through employee or employer contributions but are considered IRA-based and not governed by ERISA in most cases
• Solo 401(k) plans covering only the business owner (and spouse) with no common-law employees

Why Plan Sponsors Are Paying Attention

EBSA opens investigations for a variety of reasons. These may include participant complaints, late deferral deposits, red flags in Form 5500 filings, or concerns related to fees and fiduciary processes. During an investigation, EBSA may collect documents, interview staff, and review internal procedures. The agency has the authority to gather information and evaluate plan operations.

If a Common Interest Agreement is in place, some of that information may be shared with a private law firm preparing legal action on behalf of plan participants. This situation raises legal and reputational risks. Even if the company is working cooperatively with EBSA, its investigatory materials may be shaping a civil case in the background. And because the sharing takes place under legal privilege, the company may not learn about the agreement until formal litigation is already underway.

Legal Authority and Growing Controversy

EBSA’s authority to share investigatory materials comes from ERISA Section 504(a), which permits the agency to provide information to individuals “actually affected” by the subject of an investigation. In practice, this includes plan participants and their legal counsel. When EBSA collaborates with an outside attorney, it uses a Common Interest Agreement to preserve legal protections and limit the use of the information.

The noted lack of visibility has raised concerns among employers, legal experts, and former officials of the EBSA. Critics argue that allowing one side of a potential lawsuit to access government findings creates an uneven playing field and undermines EBSA’s role as a neutral regulator. In response, several members of Congress have introduced legislation that would require EBSA to report and disclose its use of CIAs.

What Plan Sponsors Can Do

For plan sponsors, best practices center on awareness and robust compliance measures, including:

• Documenting fiduciary decisions and oversight activities
• Ensuring timely contribution deposits and accurate recordkeeping
• Reviewing service provider contracts and fee structures
• Engaging legal counsel in the event of an EBSA inquiry or audit
• Staying informed about potential policy changes related to ERISA enforcement

Contact Us

Employers offering a benefit plan governed by ERISA should understand how EBSA investigations work and what can happen when investigatory findings are shared under a Common Interest Agreement. For plan sponsors, staying informed and proactive is crucial to managing risk effectively.

If you have questions about the information outlined above or need assistance with your next benefit plan audit, JLK Rosenberger can help. For additional information, call 949-860-9902 or click here to contact us. We look forward to speaking with you soon.