Though the amount recovered from enforcement actions by the Department of Labor's Employee Benefits Security Administration dipped for the third consecutive year, the amount the agency recovered overall held steady in fiscal year 2023.
The EBSA recovered $845 million from its enforcement actions during the fiscal year ended Sept. 30, down from $931 million in fiscal year 2022, $1.9 billion in 2021 and $2.6 billion in 2020, according to an agency fact sheet released Feb. 13.
In total, the EBSA recovered $1.4 billion for retirement, health and welfare benefits plans, participants and beneficiaries in fiscal 2023, the same figure as 2022, but down sharply from the $2.4 billion recovered in 2021 and $3.1 billion in 2020.
Lisa M. Gomez, assistant secretary for employee benefits security, said in an interview that the money the EBSA recovers has a direct benefit to affected participants or retirees and their families. "It's not penalties that are being paid into some random government fund somewhere," she said. "It's real money that is making real differences in people's lives."
The enforcement recoveries were once again paced by the Terminated Vested Participants Project, which includes missing participants. Of the $845 million recovered in enforcement actions, $429 million was from the project, down from $542 million last year and $1.5 billion each in fiscal years 2021, 2020 and 2019.
The department in 2021 released guidance that included best practices for retirement plan fiduciaries to help reduce missing-participant issues and ensure that participants receive promised benefits.
Gomez said the guidance has helped clear up plan sponsor confusion on the issue, which has led to fewer missing participant-related enforcement recoveries. "As time goes on and guidance is issued, that's kind of what you hope for," Gomez said. "You don't necessarily want to have all of these recoveries and enforcement action having to be made."
In fiscal year 2023 and into the future, Gomez said EBSA investigators are focused on plan sponsor cybersecurity protocols and enforcing the Mental Health Parity and Addiction Equity Act, a law that prohibits health plans from imposing barriers on access to mental health or substance use disorder benefits that don't apply to medical and surgical benefits.
Also of note, the EBSA's Voluntary Fiduciary Correction Program — which allows plan officials to remedy ERISA violations they've identified and voluntarily report them to the agency without facing an enforcement action — recovered $85 million in the fiscal year, up from $8 million the previous year. In November 2022, the Labor Department proposed a rule to expand the VFCP.
Moreover, Gomez touted the $444 million the EBSA recovered from informal complaint resolutions. Many of the 197,000 inquires made in the fiscal year came via the EBSA's toll-free number and website, the fact sheet noted.
The EBSA's oversight authority extends to about 765,000 retirement plans, about 2.8 million health plans, and 618,000 other welfare benefit plans, such as those providing life or disability insurance, the Labor Department said. These plans cover about 153 million workers and their dependents and have roughly $12.8 trillion in assets.
