The Employee Benefits Security Administration (EBSA) recovered nearly $600 million for direct payment to employee plans, participants and beneficiaries.
Part of the Department of Labor, EBSA’s oversight authority extends to nearly 684,000 retirement plans, approximately 2.4 million health plans, and a similar number of other welfare benefit plans, such as those providing life or disability insurance. These plans cover about 141 million workers and their dependents and include assets of over $7.6 trillion as of October 29, 2014. The EBSA shares a breakdown of the 2014 collection actions on its website:
- Total recoveries – $599.7 million;
- Plan assets restored/participant benefits recovered – $204.9 million;
- Voluntary fiduciary correction program – $20.2 million;
- Abandoned plan program – $18.4 million; and
- Monetary benefit recoveries from informal complaint resolution – $356.2 million.
EBSA says other civil investigation statistics demonstrate its success in targeting ERISA violators. In fiscal year 2014, EBSA closed 3,928 civil investigations, with 2,541 of those cases (64.7%) resulting in monetary compensation for plans or other corrective action. This represents about a 9% decrease in the rate of infractions found in 2013. Despite a small uptick in the total number of investigations in 2014, the total of nearly $600 million collected was much smaller than the $1.7 billion in plan reimbursements and fines paid in 2013 to settle EBSA criminal cases and civil violations. (The 2013 numbers are reported here.)
As noted by EBSA, plan fiduciaries have the opportunity to proactively correct violations and restore losses to employee benefit plans. However, in cases where voluntary compliance fails or is deemed inappropriate, EBSA works with the Solicitor of Labor to initiate litigation. In FY 2014, 161 cases were referred for litigation. Nationwide in 2014, the department filed suit in 107 civil cases.
EBSA notes that it has the responsibility to investigate potential violations of the criminal provisions of ERISA and those provisions of Title 18 of the United States Code that relate to employee benefit plans. EBSA conducts most of its criminal investigations with other federal law enforcement agencies under the direction of the United States Attorney for that jurisdiction.
Beyond civil penalties, EBSA investigations led to the indictment of 106 people for crimes related to employee benefit plans in 2014—including plan officials, corporate officers, and service providers. The indictments led to 85 criminal investigations closed with guilty pleas or convictions.
During 2014, EBSA received 457 applications from qualified termination administrators and closed 538 applications, with 456 plans making distributions of $18.4 million directly to participants.
Other points of success, EBSA says, were the Voluntary Fiduciary Correction Program (VCFP) and the Delinquent Filer Voluntary Compliance Program (DFVCP).The VFCP allows plan officials who have identified certain violations of ERISA to take corrective action to remedy the breaches and voluntarily report the violations to EBSA, without becoming the subject of an enforcement action. In FY 2014, EBSA received 1,643 applications for the VFCP. The DFVCP encourages plan administrators to bring their plans into compliance with ERISA's filing requirements. More than 24,000 annual reports were received through this program in FY 2014.
In 2014, EBSA's benefits advisers closed more than 213,000 inquiries and recovered $356.2 million in benefits on behalf of workers and their families through informal resolution of individual complaints. Many of the inquiries were received via EBSA's hotline (1-866-444-3272) and website (askebsa.dol.gov).
The full 2014 EBSA enforcement fact sheet is available online here.