The Employee Benefits Security Administration (EBSA) recovered $1.435 billion in direct payment to plans, participants, and beneficiaries in FY 2023, the agency reported in a Fact Sheet released today.
More than half of those recoveries ($844.7 million) were the result of enforcement actions, and more than 30% ($441.1 million) came from informal complaint resolutions. The voluntary fiduciary correction program netted $84.5 million, and the abandoned pension plan program another $61.2 million.
“I am incredibly proud to lead this agency that, despite its small size and colossal responsibilities, consistently delivers for America’s workers, retirees and their families, year after year,” said Assistant Secretary for Employee Benefits Security Lisa M. Gomez. “These victories are clear evidence of the Department of Labor’s continued leadership in keeping President Biden’s promise to be the most pro-worker administration in history.”
EBSA also noted in the Fact Sheet that it made a difference for current and future participants and beneficiaries by obtaining such important non-monetary results as the elimination of illegal plan provisions, improved fiduciary governance, and increased access to mental health benefits.
7 in 10 investigations net monetary results
In FY 2023, EBSA closed 731 civil investigations. Of those, 505 cases (69%) produced monetary results for plans or other corrective action.
Recoveries for terminated vested participants (e.g., individuals no longer working for an employer but entitled to benefits from an employer sponsored other job-based retirement plan) played a large role in these results. In total, EBSA’s enforcement program helped 5,690 terminated vested participants in defined benefit pension plans collect benefits of $429.2 million owed to them. These results represent a combination of the present values of lifetime annuity payments or cash-out lump-sum balance payments, plus interest on distributions paid as either retroactive lump sums or included in actuarially adjusted future annuity amounts.
EBSA’s enforcement program also obtains non-monetary corrections and injunctive relief in civil cases that result in increased protections for plan assets or benefits. In FY 2023, EBSA obtained 352 non-monetary civil corrections, including removing 20 fiduciaries, barring 41 individuals from serving as fiduciaries, appointing 20 fiduciaries, improving missing participant procedures for 44 plans, and 34 global corrections involving service providers for numerous ERISA-covered health plans.
EBSA often pursues voluntary compliance to correct violations and restore losses to employee benefit plans. However, in cases where those efforts have failed or are inappropriate, EBSA forwards a recommendation to the Solicitor of Labor to initiate litigation. In FY 2023, EBSA referred 50 cases for litigation. However, even after referral to the Solicitor of Labor, the Department can often resolve the claims for monetary relief without filing suit.
More from the Fact Sheet:
• 60 indictments in FY 2023: In FY 2023, EBSA closed 196 criminal investigations. The investigations led to the indictment of 60 people for crimes related to employee benefit plans.
• Abandoned Plan Program: The Abandoned Plan Program facilitates the termination of individual account pension plans abandoned by their sponsoring employers. It also helps distribute these plans’ benefits. During FY 2023, EBSA received 1,770 applications from Qualified Termination Administrators and closed 1,347 applications with terminations approved. In total, $61.2 million was distributed directly to participants as a result of these terminations.
• Voluntary Fiduciary Correction Program: EBSA’s Voluntary Fiduciary Correction Program (VFCP) and Delinquent Filer Voluntary Compliance Program (DFVCP) encourage the correction of ERISA violations by providing significant incentives for fiduciaries and others to self-correct. The VFCP allows plan officials who have identified certain ERISA violations to remedy the breaches and voluntarily report the violations to EBSA without becoming the subject of an enforcement action. In FY 2023, EBSA received 1,192 applications. The DFVCP encourages plan administrators to bring their plans into compliance with ERISA’s filing requirements. EBSA received 18,955 annual reports through this program in FY 2023. Additionally, the EFAST2 Help Desk handled over 16,000 filer inquiries to help filers meet their reporting obligations.
• Informal Complaint Resolution: The Fact Sheet reveals EBSA restored $444.1 million to workers through Informal Complaint Resolution. When workers experience a problem with an employee benefit plan, they can directly contact an EBSA Benefits Advisor for assistance. In FY 2023, EBSA’s Benefits Advisors closed more than 197,000 inquiries. Many of the inquiries came through via EBSA’s toll-free number, 1-866-444-EBSA (3272), and www.dol.gov/agencies/ebsa/about-ebsa/ask-a-question/ask-ebsa.
Each year, the Department of Labor (DOL) releases statistics regarding their actions as well as a strategic plan for enforcement.
In FY 2022, EBSA also recovered just over $1.4 billion for plans, participants, and beneficiaries, similar to FY 2023. In FY 2021, the total was more than $2.4 billion, it was over $3.1 billion in FY 2020, and over $2.5 billion in FY 2019.
Read the complete FY 2023 EBSA Fact Sheet here.
SEE ALSO:
• Talking DOL Retirement Saving Priorities with EBSA Head Lisa Gomez
• EBSA Issues FAQ Guidance for Emergency Savings Accounts
Veteran financial services industry journalist Brian Anderson joined 401(k) Specialist as Managing Editor in January 2019. He has led editorial content for a variety of well-known properties including Insurance Forums, Life Insurance Selling, National Underwriter Life & Health, and Senior Market Advisor. He has always maintained a focus on providing readers with timely, useful information intended to help them build their business.
