Enforcement actions were up significantly at the Department of Labor last fiscal year, especially with respect to missing participants, but the lack of additional guidance remains a pain point for the retirement industry, according to attorneys who specialize in ERISA-related matters.
"Broadly speaking, I have been very disappointed that the Trump administration has not provided a lot of the necessary workaday guidance from the agency," said Bradford Campbell, a Washington-based partner for Drinker Biddle & Reath LLP and former assistant secretary of labor for the Employee Benefits Security Administration during President George W. Bush's administration.
The EBSA recovered more than $1.6 billion for direct payments to plans, participants and beneficiaries last fiscal year, including $1.1 billion in enforcement actions, according to statistics on the DOL website earlier this year. The previous year, it recovered $1.1 billion, including $682 million from enforcement actions. Of note, its Terminated Vested Participant Project, which encompasses missing participants, recovered $807.7 million for participants in defined benefit plans in fiscal year 2018, up from $326.7 million the year prior, a 147% increase.
The DOL did not respond to questions as to whether it changed the way it calculates its enforcement numbers.
"It is clear that (Secretary) Alexander Acosta's DOL is continuing the enforcement priorities and overall aggressive stance that was started under the Obama administration," said Thomas E. Clark Jr., a St. Louis-based partner with The Wagner Law Group. "We're seeing that demonstrated at a macro level with these numbers and in our practice we're also seeing that at a micro level in defending plan sponsors and service providers in DOL investigations."
For plan sponsors who are not actively focusing on their fiduciary responsibilities and how best to fulfill them, the enforcement statistics should get their attention, said Carol I. Buckmann, partner at law firm Cohen & Buckmann PC in New York. "They are at risk," she added.
Attorneys said their clients are looking for guidance on issues like missing participants and employee stock ownership plans, which has been the case for several years.
Under the current administration, the DOL has filed two advisory opinions in 27 months. In the proceeding eight years under President Barack Obama, 28 advisory opinions were issued — but just four in the first two years. Under President George W. Bush, the DOL filed 102 advisory opinions in eight years, including 23 in the first two years.