Vol. XXI, Issue 33

July 1, 2022

Participant Inquiries about EY SEC Fine

As you're likely aware, Wespath partners with EY Financial Planning Services to offer financial counseling at no additional cost to eligible participants. This relationship has been in place since 2005. Every year, EY Financial Planning Services assists over 5,000 participants with their financial planning needs.

On Tuesday, June 28, the Securities and Exchange Commission (SEC) announced that it has taken enforcement action against Ernst & Young LLP (EY) for cheating by its audit professionals on exams required to obtain and maintain Certified Public Accountant (CPA) licenses, as well as for withholding evidence of this misconduct from the SEC. EY has admitted the facts underlying the SEC's charges and agreed to pay a $100 million penalty and undertake extensive remedial measures to address the firm's ethical issues.

As this news has spread, we've received some inquiries from concerned participants asking if Wespath will be severing ties with EY in response to these allegations. We are currently responding to these inquiries on an individual basis.

We have also been in conversation with our EY contacts. They understand our concerns and have assured us the financial planning services business area is in no way part of, or related to, the business unit at issue in the SEC action. As an organization that employees more than 300,000 employees, EY has multiple business units, and these two business units operate completely separately.

Given the separation of these business units, we do not currently intend to end our relationship with EY. We will work closely with them to gather information on their financial planning services practices and procedures relative to their planner qualifications, certifications, and continuing education requirements.

In selecting external partners that interact with and support participants and plan sponsors, we seek to do so in a way that builds confidence. As we continue to work through this situation and dialogue with EY, we want to continue to hear and consider the concerns of our participants and plan sponsors.

Please use this information to address individual inquiries you may receive. We ask however, that you not distribute this information broadly. If you have any questions, concerns or need additional information, please contact Tony Prestipino at tprestipino@wespath.org


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