The Department of Labor (DOL) and its Employee Benefits Security Administration (EBSA) issued the fiscal year (FY) 2020 enforcement fact sheet, highlighting the recovery of over $3.1 billion in direct payments to plans, participants, and beneficiaries. A related news release shows that monetary recoveries from EBSA enforcement activity have increased significantly over the last few years.

EBSA has oversight responsibility to nearly 722,000 retirement plans, 2.5 million health plans, and a similar number of other welfare benefit plans (such as life and disability insurance plans). These plans cover approximately 154 million workers and their dependents and represent assets exceeding $10.7 trillion. In FY 2020, EBSA conducted 1,122 civil investigations, 754 of which (67%) resulted in monetary results for plans or other corrective action. Nonmonetary corrective actions included removal of plan fiduciaries, appointment of independent fiduciaries, and implementation of new plan procedures.

Figure 1: Total Monetary Recoveries

Total Recoveries Recoveries from Enforcement Actions Voluntary Fiduciary Correction Program Abandoned Plan Program Monetary Benefit Recoveries from Informal Complain Resolution
$3.142 billion $2.602 billion $12 million $54 million $456 million

Source: DOL, EBSA 2020 Fact Sheet

Of the $3.1 billion in recovered assets, $2.602 billion resulted from enforcement actions, and $456 million was generated by benefit recoveries from informal complaint resolution. For the year, the DOL handled 171,863 inquiries, many received through the EBSA’s toll-free number and website, and opened 357 investigations based on those inquiries.

What Does This Mean for Plan Fiduciaries and Sponsors?

Plan fiduciaries and administrators should take note of the EBSA’s enforcement activity and consider performing a self-audit of their plans to identify areas in need of corrective action to limit potential liability exposure.

It's also essential for retirement plan fiduciaries and plan sponsors to be well-versed on new DOL regulation, and plans must be established prudently and adhere to the standards and rules set forth. Understanding your retirement plan fiduciary requirements and conducting periodic, comprehensive, and detailed retirement plan committee meetings have become extremely important tasks for retirement plans to follow.

Additionally, with strict fee disclosure laws put in place years ago, plan sponsors are under continued pressure to ensure they are getting the appropriate fee disclosure information from their plan provider and that these fees are reasonable. Conducting periodic plan fee benchmarking and advocating to maintain reasonable plan fees is an important responsibility of plan fiduciaries.

There’s no “one-size-fits-all” approach to how you run your retirement plan investment committee. However, implementing best practices for your investment committee can go a long way toward helping to ensure your plans maintain their proper due diligence and protect against potential DOL implications. The advisors at Wealth Enhancement Group can provide you with the help and advice to getting your investment committee established properly.

Brian Gregov

Brian Gregov

Director, Retirement Plan Consulting

CPFA, AIF®, QKA Brian leads a highly qualified team and oversees the retirement plan governance and fiduciary responsibilities for his clients, along with their administration, operations and design. He has more than 20 years of broad experience working in retirement solutions, including managing plans for large, multi-hundred-million-dollar corporations as well as small businesses. Brian supports his clients by designing customized retirement plans that are focused on specific goals and...Read More