While the Department of Labor’s Employee Benefits Security Administration (EBSA) recovered $1.435 billion in direct payment to plans, participants and beneficiaries in fiscal year 2023, that number has been trending downward for the past few years.
According to a fact sheet released by EBSA, more than half of those recoveries were the result of enforcement actions and more than 30% came from informal complaint resolutions.
Yet, despite the sizeable number, the overall amount is less than half of the $3.12 billion EBSA recovered in FY 2020, and a billion less than $2.4 billion recovered in FY 2021. For FY 2022, the recovered amount was constant at $1.4 billion.
In sum, the $1.435 billion in total monetary recoveries for FY 2023 included:
- Enforcement actions: $844.7 billion
- Informal complaint resolution: $444.1 billion
- Voluntary Fiduciary Correction Program: $84.5 billion
- Abandoned Plan Program: $61.2 billion
“At least $1 billion of that drop off from FY 2020 is due to reductions in recoveries from missing participant enforcement,” noted Kelsey Mayo, Director of Regulatory Policy at the American Retirement Association. “I think that reflects a general shift in industry toward adopting more robust procedures to stay in touch with terminated participants or find them if they don’t provide the plan with updated information.”
Enforcement Actions
As to the current $844.7 million recovered through enforcement actions, EBSA notes that it closed 731 civil investigations in FY 2023.[1] Of those, 505 cases (69%) produced monetary results for plans or other corrective action.
Recoveries for terminated vested participants played a key 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. According to the fact sheet, 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.
In FY 2023, EBSA also 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 also referred 50 cases for litigation. However, even after referral to the Solicitor of Labor, the DOL can often resolve the claims for monetary relief without filing suit. EBSA often pursues voluntary compliance to correct violations and restore losses, but in cases where those efforts have failed, EBSA forwards a recommendation to the Solicitor of Labor to initiate litigation, the fact sheet explains.
Drilling down further, EBSA notes that its investigations led to the indictment of 60 individuals, including plan officials, corporate officers and service providers, for offenses related to employee benefit plans. Overall, EBSA closed 196 criminal investigations in FY 2023.
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 and recovered $444.1 million in benefits on behalf of workers and their families through informal resolution of individual complaints.
Abandoned Plan Program
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.
According to EBSA, these results include plan assets restored, benefits paid to participants, disgorgement of profits, reversal of prohibited transactions that benefit the plan or participants and voluntary fiduciary corrections, as well as amounts recovered through the abandoned plan program and informal complaint resolution.
Compliance Assistance
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, meanwhile, encourages plan administrators to bring their plans into compliance with ERISA's filing requirements. In this case, 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.
“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,” Assistant Secretary for Employee Benefits Security Lisa Gomez said in a statement announcing the results. “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.”
A copy of EBSA’s FY 2023 Enforcement Fact Sheet can be found here.
[1] For comparison, EBSA closed 1,122 civil investigations in FY 2020, with 754 of those cases (67%) resulting in monetary results of $2.6 billion for plans or other corrective action.
