Every year, the DOL’s Employee Benefits Security Administration (EBSA) recovers funds for the participants of company sponsored retirement plans, and 2023 was no different. Enforcement action and complaint resolution, as well as the abandoned plan program and voluntary fiduciary corrections, led to the recovery of $1.435 billion.
Diligence With Retirement Dollars
Every dollar counts, and indeed, plan sponsors are accountable for ensuring that all participants benefit from every dollar saved in company sponsored plans. To ensure they do, under the high standards of ERISA law, the Department of Labor’s EBSA division keeps up a robust practice of recovery initiatives. Note, for example, that of the $1.435 returned to participants in 2023, “more than half of those recoveries were the result of enforcement actions and more than 30% came from informal complaint resolutions.” EBSA takes pride in delivering “for America’s workers, retirees and their families, year after year,” and shares these additional details about fund recovery in 2023:
EBSA notes that it closed 731 civil investigations in FY 2023. Of those, 505 cases (69%) produced monetary results for plans or other corrective action….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….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….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 remains a key prong of EBSA effort: in 2023, the administration successfully closed over 197,000 of the inquiries that came in from workers, recovering “$444.1 million in benefits on behalf of workers and their families.” EBSA also maintains a robust practice of compliance assistance, encouraging plan fiduciaries to self-correct ERISA violations through the Voluntary Fiduciary Correction Program (VFCP) and the Delinquent Filer Voluntary Compliance Program (DFVCP):
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.
It’s a good idea for plan sponsors to be proactive with EBSA’s Voluntary Fiduciary Correction Program, as well as to be aware that the penalty fees for ERISA violations have recently been increased. Plan sponsors also need to be mindful that under the high standards of ERISA, even seemingly simple oversights are known to open the doors for investigation. For example, compliance failures related to the ERISA Fidelity Bonds required by the Department of Labor for everyone involved in handling funds or property of the retirement plan (in any way) routinely draw attention.
Remember, Colonial Surety Company makes it efficient and affordable for plan sponsors to remain compliant with their ERISA Bonds and protect themselves and their businesses. Specifically, by adding Fiduciary Liability coverage, for a few dollars a day, you’ll have defense costs and penalty limits up to $1,000,000 if faced with alleged or actual breaches of duty in connection with the employee retirement plan. Cyber liability coverage is included at no extra cost, providing additional protection–for the plan and your company–against regulatory actions related to data and privacy, as well as expert response services.
At Colonial, adding Fiduciary & Cyber Liability Insurance to your ERISA fidelity bond is quick – login to your dashboard, click “upgrade” next to your bond, and get a quote. Our packages are available for 1, 2, and 3-year terms, providing flexibility and locked-in rates:
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