House GOP Leaders Criticize DOL Investigations for ‘Hurting American Savers’

Noting that “prolonged investigations carried out by federal agencies, such as EBSA, create tremendous strain on retirement plan sponsors,” two key House Republicans are pushing back.

In a Sept. 19 letter to Acting Secretary of Labor Julie Su, Rep. Virginia Foxx (R-N.C.), chair of the Education and the Workforce Committee, and Rep. Bob Good (R-Va.), chair of the Health, Employment, Labor and Pensions Subcommittee, note that Committee on Education and the Workforce is conducting oversight of the Employee Benefits Security Administration’s (EBSA) enforcement of Title I of ERISA.

“Disturbing reports from stakeholders indicate that EBSA is failing to conduct its enforcement in a timely manner, creating unacceptable burdens for retirement plan sponsors and negatively impacting retirement savers, retirees, and their families,” the letter states. 

“Plan sponsors report that many of EBSA’s investigations have persisted for years while investigators assigned to these cases are turned over several times. The Government Accountability Office (GAO) has also raised this concern. In May 2021, GAO found that 17 percent of all investigations opened in 2017 were still open four years later,” the letter further explains.

They also note that “plan sponsors also report there often appears to be no direction or purpose to the investigations, and they are trapped in investigations that lack an objective, an enforced progress schedule, or an endpoint.” Also cited were concerns that “there seems to be no limit on the amount of document requests, interviews, and questions an investigator may ask. The result is increased compliance costs, which harm those participating in employer-sponsored retirement programs.”

The letter concludes by noting that in order “to understand the steps EBSA has taken to provide effective management of its resources in the Office of Enforcement, we seek responses to the following requests.”

• A list of all open investigations by the initial date the investigation opened (grouped by calendar quarter), the duration of the investigation, and the specific purpose of the investigation. The name of the plan sponsor does not need to be disclosed, but the regional office responsible for the investigation should be listed.
• An explanation of any timeframes or internal guidance imposed on the timeliness of conducting and closing out investigations, as well as procedures that are taken to ensure those timeframes are honored.
• A sample copy of personnel appraisal criteria for ensuring investigations are timely and efficiently carried out and closed.
• An explanation of the specific steps taken to close all persisting investigations and the consequences to investigators, their supervisors, and EBSA management if investigations are allowed to languish beyond efficient timeframes.

And the authors say they expect a response by Oct. 3… in accordance with a detailed list of 25 specifications for responding to their request—with a special section devoted to definitions of things like “document,” “documents in your possession, custody or control,” and the terms “and,” and “or”. 

Meanwhile, the letter comes on the heels of another letter sent to Su in late August from Foxx and Sen. Bill Cassidy, M.D. (R-LA), who is the ranking member of the Senate Health, Education, Labor, and Pensions (HELP) Committee, urging Su to cease any further action to amend the definition of an investment advice fiduciary. The department sent a new version of a proposed fiduciary rule to the Office of Management and Budget on Sept. 8 for review.  

READ THE FULL LETTER HERE.