The Employee Benefits Security Administration (EBSA), an office within the Department of Labor (DOL) recently announced that for fiscal year 2019, they recovered over $2.5 billion that went directly back to employee benefit plans, plan participants, and plan beneficiaries. The EBSA is tasked with investigating complaints against private employee benefit plans governed under the Employee Retirement Income Security Act of 1974, as amended (ERISA) or over a half-million retirement plans and over two million health benefit plans. In total, these plans are estimated to represent almost $10 trillion in assets.
Monetary Recoveries
The $2.5 billion in monetary recoveries was broken up between monies recovered in enforcement actions ($2 billion), voluntary corrections ($14 million), abandoned plans ($33 million), and recoveries from informal complaints ($510 million). This included over one thousand civil investigations that ended 67% of the time in a monetary recovery. Only 89 of the investigations were referred for litigation.
One area of focus for these investigations was recoveries for vested participants who were terminated incorrectly by their defined benefits plans. The value of recoveries for these individuals ($1.5 billion) is a combination of lifetime annuity payments that were and will be made to these individuals and their beneficiaries once EBSA determined that they were owed the funds as well as interest distributions owed either retroactively or going forward.
Crimes Related to Benefit Plans
EBSA is tasked with criminal investigations into ERISA-governed plans in conjunction with other U.S. law enforcement agencies. In fiscal year 2019 there were 275 criminal investigations resulting in 80 guilty pleas and convictions and 76 individual indictments. Those individuals include plan officers, corporate officers, and other service providers who work closely and have fiduciary roles in managing benefit plans.
Voluntary Compliance and Complaint Resolution
EBSA encourages companies to work to correct plan problems before they rise to the level where an investigation is required. The Voluntary Fiduciary Correction Program and Delinquent Filer Voluntary Compliance Program give companies a path to self-correct errors as they are discovered in the regular course of business. Plan fiduciaries can take corrective actions and self-report to EBSA and avoid other enforcement actions.
EBSA also has a process for workers to complain about issues with their benefit plans. Workers can directly contact EBSA and work with them to resolve situations and, if appropriate, get a monetary recovery. These complaints can lead to enforcement actions, particularly when there are repeated complaints.
Understanding these statistics helps plan fiduciaries and participants understand the importance of complying with federal regulations and the costs of noncompliance. The experienced team at Hall Benefits Law helps guide our clients to both avoid liability and put in processes to manage plans and plan liability in a compliant fashion. Learn more by calling 678-439-6236 or visiting the Hall Benefits Law website.
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