DOL’s EBSA recovered $1.4B in retirement, health benefits in 2023

The Employee Benefits Security Administration (EBSA) recently announced that about half of the $1.4 billion amount came from enforcement actions ($844.7 million) and 30% came from informal complaint resolutions ($444.1 million).

it had returned more than $1.4 billion to retirement and health plans, participants and beneficiaries due to enforcement actions and complaint resolutions. The regulatory enforcement covers fiscal year 2023.

EBSA, part of the U.S. Department of Labor (DOL), said through a statement that many workers in lower-paying positions may go from job to job, which often results in losing track of retirement savings accounts. In addition, companies that go out of business or are bought out may have accounts that also get lost in the shuffle.

The 2023 announcement is seen as a positive step for workers and for the industry in general. However, industry observers noted that the large dollar figure of recovered funds for 2023 is actually smaller than in past years, which may reflect better compliance among employers in the U.S., as well as some changing priorities at DOL and EBSA.

A range of efforts to improve retirement security

The EBSA statement included a fact sheet that outlines the range of efforts the agency is making to improve the retirement savings industry and make sure Americans are not losing money due to poor plan management practices. The agency said that about half of the $1.4 billion amount came from enforcement actions ($844.1 million) and 30% came from informal complaint resolutions ($444.1 million).

The enforcement actions included investigations that led to the indictment of 60 individuals, and 196 criminal investigations. Informal complaint resolutions include cases where individuals contact EBSA about missing or misplaced funds. EBSA also worked with industry players to reconcile abandoned plans and to distribute funds recovered from terminated plans. EBSA also had programs in place to encourage improved compliance by providing incentives for fiduciaries and others to self-correct.

“I am incredibly proud to lead this agency that, despite its small size and colossal responsibilities, consistently delivers for America’s workers, retirees and their families, year after year,” said Assistant Secretary for Employee Benefits Security Administration Lisa M. Gomez. “These victories are clear evidence of the Department of Labor’s continued leadership in keeping President Biden’s promise to be the most pro-worker administration in history.”

Fund recovery is actually down, and priorities may be changing

A report in Bloomberg Law pointed out that recoveries in this area have actually leveled off after a high of $3.1 billion in economic recoveries by EBSA for the 2020 fiscal year. The article noted a renewed emphasis on recovering funds may be leading industry players to a higher level of compliance, and of course the recent SECURE 2.0 law also has provided incentives and mechanisms to make sure funds are not lost or forgotten.

Gomez agreed that the lower rates of recoveries indicated that the industry was doing a better job with compliance. “It’s a good thing for recoveries in that area to not be continuing at that level, because, hopefully, that’s telling us that we’re getting plans that are reading our guidance, seeing what’s happening, hearing about all of the enforcement that is happening by the Department of Labor, and taking action,” Gomez told Bloomberg Law.

The agency is also shifting priorities—putting more emphasis on private-sector oversight in the area of mental health parity. Last August, DOL announced a significant new regulatory rule on mental health parity requirements, which say private insurers should cover mental health treatment at similar levels to coverage of medical health conditions.

The Aug. 7 statement noted that mental health has become a much bigger priority for Americans in general, and that employer-sponsored health care plans will be expected to provide adequate coverage under the law.

Related: The true cost of ‘forgotten’ 401(k) accounts: $1.65 trillion

“The proposed rule focuses on ensuring that Americans do not face roadblocks and barriers to getting mental health and substance use disorder treatment that they don’t face when seeking medical benefits,” the statement said. “Consistent with this goal, the proposed rule would also require health plans and insurance companies to show their compliance [on mental health coverage] – not just with words – but with data to demonstrate what effect the limits they place on benefits have on a person’s access to treatment. The proposed rule also specifically focuses on how plans construct their provider networks, which is a key factor that impacts a person’s ability to access care.  If a person needs mental health or substance use disorder care but can’t reasonably access a provider in their plan’s network to get that care, we are not doing right by them.”