EBSA Enforcement Action Recovery Efforts Climb Again

Total monetary recoveries by the Department of Labor’s Employee Benefits Security Administration (EBSA) enforcement and oversight activity in fiscal year 2020 apparently hit a record. 

According to an annual fact sheet released by the agency, EBSA recovered more than $3.1 billion in direct payments to plans, participants and beneficiaries in FY 2020. By comparison, EBSA recovered $2.57 billion in FY 2019, $1.6 billion in FY 2018 and $1.1 billion in FY 2017 for a total recovery of $8.4 billion over the four-year period. The federal government’s fiscal year is Oct. 1-Sept. 30.

Investigations Drop Slightly

While EBSA recovered more money in FY 2020, the overall numbers for investigations and litigation eased up a bit. For FY 2020, the agency closed 1,122 civil investigations, with 754 of those cases (67%) resulting in monetary results for plans or other corrective action for a total of over $2.6 billion. The agency also referred 82 cases for litigation. By comparison, EBSA closed 1,146 civil investigations and referred 89 cases for litigation in FY 2019.

Recoveries on behalf of terminated vested participants played a large role in those results for FY 2020. The fact sheet shows that EBSA’s enforcement program helped over 29,600 terminated vested participants in DB plans collect benefits of over $1.48 billion, while all other investigations yielded $1.12 billion. 

It closed 230 criminal investigations and reports that its participation in criminal investigations with other law enforcement agencies led to the indictment of 70 individuals—including plan officials, corporate officers and service providers. In addition, 59 of the closed criminal investigations led to guilty pleas or convictions, the data shows.

Compliance Assistance Programs 

In addition to monetary results, EBSA’s enforcement program also obtains non-monetary corrections and injunctive relief that result in increased protections for plan assets or benefits. During FY 2020, EBSA notes that it obtained non-monetary results in over 400 cases.

EBSA’s Voluntary Fiduciary Correction Program (VFCP) received 1,309 applications in FY 2020, while its Delinquent Filer Voluntary Compliance Program (DFVCP) received 19,624 annual reports through this program in FY 2020, with corrections totaling $12 million for the fiscal year. By comparison, EBSA received more than 20,000 delinquent filings and 1,600 applications for the VFCP, with corrections totaling $14.6 million during FY 2019.   

The agency also continues to see large impacts in its Abandoned Plan Program. EBSA received 1,161 applications from Qualified Termination Administrators during FY 2020 and closed 1,110 applications with terminations approved. In total, 882 plans made distributions of $54 million directly to participants pursuant to such terminations. 

EBSA Benefit Advisors in FY 2020 closed more than 171,000 inquiries and recovered $456.3 million in benefits through the office’s informal complaint resolution process. The agency notes that these inquiries sometimes lead to enforcement actions and will be referred for investigation when the agency becomes aware of repeated complaints or when there is information indicating a violation of ERISA. In FY 2020, EBSA opened 357 new investigations from Benefit Advisors referrals.

In sum, total monetary recoveries for FY 2020 included:

• $2.6 billion from enforcement action; 
• $456 million from informal complaint resolutions;
• $54 million from the Abandoned Plan Program; and
• $12 million from the Voluntary Fiduciary Correction Program.

A fact sheet detailing EBSA’s enforcement program results is available on its website, here.