The DOL recently released a Fact Sheet detailing monetary recoveries that its Employee Benefits Security Administration (“EBSA”) obtained for its 2018 fiscal year, which ended on September 30, 2018. These recoveries all dealt with employee benefit plans covered by ERISA.
The total of approximately $1.6 billion consisted of recoveries from enforcement actions (e.g., plan investigations) in the amount of $1.1 billion, recoveries from informal complaint resolutions in the amount of $443.2 million, recoveries under the Voluntary Fiduciary Correction Program (“VFCP”) in the amount of $10.8 million, and recoveries under the Abandoned Plan Program of $33.4 million. The Fact Sheet also states that EBSA closed 1,329 civil investigations, 860 of those resulted in monetary results for plans (or other corrective action), and the DOL filed 56 civil lawsuits (i.e. cases not involving criminal violations of ERISA). With respect to criminal violations of ERISA, EBSA closed 268 investigations. Those resulted in the indictment of 142 individuals, such as plan officials, corporate officers, and service providers.
The Fact Sheet also provides data regarding EBSA’s amnesty programs, under which plan sponsors and their advisors can apply for relief for certain civil ERISA violations. First, EBSA received 1,414 applications under its VFCP. That program allows plan fiduciaries to obtain relief from certain penalties associated with specific types of conduct outlined in the VFCP (e.g., the late remittance of participants’ contributions and loan repayments to a 401(k) plan). Second, EBSA received 19,937 annual reports through its Delinquent Filer Voluntary Compliance Program (“DFVCP”), which allows plan sponsors to avoid potentially significant penalties regarding the late filing of Form 5500. In this connection, the Fact Sheet states that the VFCP and the DFVCP provide “significant incentives” for fiduciaries and others to self-correct violations covered by those programs. I heartily agree with that statement because those programs, if properly utilized, can save plan sponsors tremendous amounts of money in potential penalties.
In addition, the Fact Sheet includes statistics regarding EBSA’s success in the area of informal complaint resolutions. These arise when employees with a complaint involving an employee benefit plan contact EBSA benefit advisors for assistance. In fiscal year 2018, EBSA’s benefits advisors closed more than 170,000 inquiries on behalf of employees and their families through this process, and this process also led to EBSA opening 524 new investigations.
Here is a link to the Fact Sheet: https://www.dol.gov/sites/default/files/ebsa/about-ebsa/our-activities/resource-center/fact-sheets/ebsa-monetary-results.pdf