DOL ERISA Enforcement Results Increase From Previous Year

The agency’s enforcement report describes some ways enforcement actions are initiated.

The Department of Labor (DOL)’s Employee Benefits Security Administration (EBSA)’s oversight authority extends to nearly 722,000 retirement plans, approximately 2.5 million health plans and a similar number of other welfare benefit plans. These plans cover about 154 million workers and their dependents and include assets of more than $10.7 trillion.

Through its enforcement of the Employee Retirement Income Security Act (ERISA), in fiscal year (FY) 2020, the EBSA recovered more than $3.1 billion in direct payments to plans, participants and beneficiaries. FY 2020 ended September 30.

In FY 2020, the EBSA closed 1,122 civil investigations with 754 of those cases (67%) resulting in monetary results for plans or other corrective actions. Recoveries on behalf of terminated vested participants played a large role in these results. In total, the EBSA’s enforcement program helped more than 29,600 terminated vested participants in defined benefit (DB) plans collect benefits of over $1.48 billion owed to them.

The EBSA’s report on enforcement results offers insights into how enforcement actions against plans might be initiated. The agency often pursues voluntary compliance as a means to correct violations and restore losses to employee benefit plans. However, in cases in which voluntary compliance efforts have failed, or are inappropriate, the EBSA forwards a recommendation to the Office of the Solicitor of Labor to initiate litigation.

In FY 2020, the EBSA referred 82 cases for litigation. Together, the EBSA and the Office of the Solicitor of Labor determine which cases are appropriate for litigation, after considering the ability to obtain meaningful relief through litigation, the cost of litigation, the viability of other enforcement options and agency enforcement priorities. However, even after referral to the Office of the Solicitor of Labor for litigation, the agency can often resolve the claims for monetary relief without filing suit.

The 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 plan fiduciaries and others to self-correct. The VFCP allows plan officials who have identified specified ERISA violations to take corrective action to remedy the breaches and voluntarily report the violations to the EBSA, without becoming the subject of an enforcement action. In FY 2020, the agency received 1,309 applications for the VFCP.

In addition, when workers experience a problem with an employee benefit plan, they can directly contact EBSA Benefit Advisors for assistance. In FY 2020, EBSA Benefits Advisors closed more than 171,000 inquiries and recovered $456.3 million in benefits on behalf of workers and their families through informal resolutions of individual complaints.

These inquiries sometimes lead to enforcement actions. When the EBSA becomes aware of repeated complaints with respect to a particular plan, employer or service provider, or when there is information indicating a violation of ERISA, the matter will be referred for investigation. In FY 2020, the agency opened 357 new investigations from Benefits Advisors referrals.

However, the EBSA also conducts education and outreach events for employers and plan officials. The agency also reaches employers and plan service providers through its printed materials on its website at Visitors to the EBSA website can view and receive consumer information, relevant laws and regulations, technical guidance, seminar and webcast schedules, and other valuable resources.

The EBSA’s 2020 enforcement results fact sheet is here.