The government is nearing a shutdown. Here’s what that would mean for federal agencies.

Congress is nearing its deadline to avoid a government shutdown this weekend, which could mean significant impacts to finance and retirement-focused federal agencies in Washington.

Lawmakers originally reached a deal earlier this week to temporarily fund the government until March, proposing legislation that included a host of provisions, including restricting outbound investments in China. However, President-elect Donald Trump on Dec. 18 said he opposed that bill, and House Majority Leader Steve Scalise, R-La., later declared the measure dead, according to Bloomberg.

Vice President-elect JD Vance told reporters that he “had a productive conversation” with House Speaker Mike Johnson, R-La., the night of Dec. 18, Bloomberg reported, but it’s unclear whether lawmakers will be able to renegotiate and ultimately pass legislation before their deadline late on Dec. 20 to do so.

If funding legislation isn't passed by then, the federal government will shut down, which would mean major changes for agencies such as the SEC and Department of Labor.

The SEC would reduce its staff from more than 5,000 employees to less than 400, meaning about 92% of the staff would be furloughed in the event of a shutdown, according to the agency’s operations plan for a government shutdown.

The plan notes that a shutdown would reduce the agency’s enforcement division to “a limited number of staff on duty,” though the staff would “attempt to respond to certain critical matters, including allegations of ongoing fraud and misconduct.”

Many of the SEC’s major functions would be on hold during a shutdown, as the agency would not review or approve registration applications; “engage in non-emergency rulemaking”; “engage in ongoing litigation” or “non-emergency examinations and inspections”; and would not conduct routine oversight of self-regulatory organizations or the Public Company Accounting Oversight Board, according to the plan.

The DOL’s Employee Benefits Security Administration would furlough 666 of its 830 employees if faced with a shutdown, depleting the agency to about 20% of its normal staff, according to the Labor Department’s contingency plan.

Lisa M. Gomez, head of EBSA since 2022, told Pensions & Investments earlier this month that she has a few key pieces of EBSA’s agenda to finish before she's out of a job come Jan. 20, when Trump takes office again.

That includes issuing a final rule codifying the automatic-portability process so a worker's 401(k) plan can be automatically rolled over to a new employer when changing jobs. In January, EBSA released a proposal on that issue to implement a provision from SECURE 2.0, the retirement security package passed in 2022, that allows an auto-portability provider to receive a fee in connection with executing such a transaction.

Gomez also said EBSA is planning to issue a final rule expanding its Voluntary Fiduciary Correction Program, which allows ERISA-covered retirement plan sponsors to self-correct violations of law, like failure to send employee contributions or participant loan repayments to retirement plans in a timely manner. The agency issued a proposal expanding the program in November 2022, and a final rule is now before the White House’s Office of Management and Budget for review.

In the event of a shutdown, Gomez herself is not subject to furlough, but EBSA’s activities would be restricted, according to the DOL contingency plan.

The Bureau of Labor Statistics would completely cease operations during a shutdown, the DOL plan notes, which — depending on how long a shutdown lasts — could mean the agency doesn’t produce the next monthly employment report, scheduled for Jan. 10, or the next consumer price index, scheduled for Jan. 15.

The longest government shutdown in history was also the most recent and spanned 35 days, from December 2018 to January 2019, during Trump’s first administration.

While the Social Security Administration would furlough nearly 14% of its staff if faced with a shutdown, the agency said in its contingency plan that it would “continue activities critical to (its) direct-service operations and those needed to ensure accurate and timely payment of benefits.”