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March 22, 2018
DOL Monetary Recoveries for Benefit Plans, Participants Rose 42% in FY 2017

By Jane Meacham, Contributing Editor

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U.S. Department of Labor (DOL) monetary recoveries on behalf of benefit programs and participants by its Employee Benefits Security Administration (EBSA) unit topped $1 billion for fiscal year 2017, 42% greater than the $777.5 million recovered in FY 2016, statistics from the department showed.

Monetary recoveryOf the $1.1 billion recovered, $682.3 million came from enforcement actions. In obtaining these monetary results, EBSA said it closed 1,707 civil investigations, with 65.3% of these cases resulting in monetary recoveries or other corrective action, according to the statistics released in an EBSA fact sheet.

EBSA said its recoveries included plan assets, participant benefits, disgorgement of profits, reversal of prohibited transactions, and voluntary fiduciary corrections. The figures also include amounts recovered through the abandoned plan program and informal complaint resolution.

EBSA also referred 134 cases for civil litigation following failed efforts for voluntary compliance by the plans. The DOL actually filed suit in 50 such cases. In the criminal area, EBSA closed 307 cases (79 with convictions or guilty pleas) and obtained indictments against 113 individuals, including plan officials, corporate officers, and service providers.

Key Points

Here are some other key points from EBSA’s reporting on its enforcement activities for the year that ended September 30, 2017:

  • The agency’s enforcement activities remain active and underwent a significant increase even after the change in presidential administration. Specifically, the fact that DOL’s recoveries nearly doubled from $352 million in 2016 suggests that the Trump administration’s arrival has not yet diminished EBSA’s enforcement efforts, wrote attorney Elizabeth S. Goldberg of the law firm Morgan Lewis in a January 29 blog post.
  • Through its abandoned plan program, EBSA received 1,004 applications in FY 2017 from Qualified Termination Administrators, and closed 584 of them with terminations approved.
  • Distributions of $27.9 million were made directly to participants by 586 terminating plans involved in the abandoned plan initiative.
  • In the year, EBSA received 1,303 applications for its Voluntary Fiduciary Correction Program (VFCP), which provides incentives for fiduciaries and others to self-correct.
  • The Delinquent Filer Voluntary Compliance Program (DFVCP) accepted 22,139 annual reports and took in $14.4 million in the latest year.
  • Of the $682.3 million recovered in its investigations, EBSA helped terminated vested participants in defined benefit plans collect benefits of $326.7 million due and owing to them.

EBSA in recent years has made investigations involving such terminated vested participants a significant enforcement priority, and many large Employee Retirement Income Security Act (ERISA) defined benefit (DB) plans have been the subject of these investigations.

High Priority

By highlighting these monetary recoveries on behalf of DB plan terminated vested participants, EBSA seems to be signaling that these investigations are a high priority for the agency. They also made up a substantial portion—nearly half—of EBSA’s FY 2017 enforcement recoveries.

“[T]hese enforcement statistics affirm that EBSA remains an active enforcement agency, with an extremely robust program to investigate and identify violations of ERISA’s fiduciary duties,” Goldberg said in her blog post on the agency’s 2017 enforcement report.

Furthermore, EBSA’s informal complaint resolution program closed more than 174,000 inquiries and recovered $418.7 million in benefits on behalf of workers. The program responds to individual complaints received through phone calls to the agency or its website. EBSA said 617 new investigations were opened in FY 2017 as a result of referrals from benefits advisers to the complaint program.

In general, the EBSA report said it had 4.17 million visitors to its website in the latest fiscal year and it distributed 321,815 resource publications. It also conducted a total of 1,815 outreach events in the year, ranging from congressional briefings to dislocated worker rapid response sessions and compliance assistance activities.

The nearly 681,000 retirement plans, 2.3 million health plans, and other welfare benefit plans that EBSA oversees included assets of $8.7 trillion as of October 2, 2015, the fact sheet said. The benefit plans cover 143 million workers and their dependents.

Jane Meacham is the editor of BLR's retirement plan compliance publications. She has nearly 30 years' experience as a writer/editor of financial services news.

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