EBSA 2024 Enforcement Efforts and Trends/Tips for 2025
The Employee Benefits Security Administration (EBSA), the Department of Labor (DOL) sub-agency that oversees ERISA regulation of retirement plans, recovered nearly $1.4 billion for employee benefit plans, participants, and beneficiaries in FY 2024, according to the EBSA’s annual enforcement fact sheet. (The Department of Labor operates on a fiscal year beginning on October 1 and ending September 30; e.g., October 1, 2023, through September 30, 2024.) EBSA oversees 2.6 million health plans, 801,000 private pension plans, and 514,000 other welfare benefit plans, covering 156 million individuals.
Enforcement results for FY 2024 were consistent with FY 2023’s results. Although we expect changes in EBSA enforcement priorities and activities beginning in FY 2025 given the change in administration, looking back at the most recent statistics can still be instructive for identifying trends and tips.
Monetary Recoveries by Source
| Program | $ in Millions |
|---|---|
| Investigations | $742 |
| Informal Complaint Resolution | $544 |
| Abandoned Plans Program | $54 |
| Voluntary Fiduciary Correction Program (VFCP) | $44 |
Key Findings:
EBSA received nearly 200,000 complaints from informal participants and beneficiaries through its website and phone calls.
Seventy-one percent of the plans investigated were faulty, requiring plan sponsors to restore losses and/or take other corrective action. TIP: Most investigations start because of participant complaints and faulty Form 5500 filings.
Delinquent Filer Voluntary Compliance Program (DFVCP) applications increased in FY 2024, reflecting growing engagement with voluntary corrections.
TIP: EBSA has two voluntary compliance programs: The DFVCP, generally, for allowing plan administrators who have failed to file timely Form 5500s to comply with ERISA reporting obligations voluntarily, and the Voluntary Fiduciary Correction Program (VFCP) for fixing 19 types of plan infractions. The VFCP has recently been revamped to now allow for self-corrections without submitting a VFCP application to EBSA, to address two common infractions related to delinquent participant contributions and loan repayments.
Year-Over-Year Trends
| Metric | FY 2023 | FY 2024 | Change/Observation |
|---|---|---|---|
| Total Recovered | $1.4B+ | $1.384B | Unchanged |
| Civil Investigations Closed | 731 | 729 | Slight decrease |
| % with Monetary Results | 69% | 71% | Slight increase |
| Criminal Investigations Closed | 196 | 177 | Decrease |
| Indictments | 60 | 68 | Increase |
| Convictions/Guilty Pleas | Not specified | 161 | Data newly reported |
| Litigation Referrals | 50 | 53 | Slight increase |
| VFCP Applications | 1,192 | 1,162 | Slight decrease |
| DFVCP Reports | 18,955 | 20,009 | Increase |
| Plans/Participants Covered | 153M | 156M | Increase |
What to Expect for 2025
Daniel Aronowitz, the nominee to lead EBSA, testified at his hearing that he plans a robust agenda to:
Provide regulatory clarity,
Improve EBSA’s enforcement of fiduciary law, and
Encourage plan sponsors to expand access to retirement and health care benefits.
Central to his testimony is Mr. Aronowitz’s view that it is necessary to “provide regulatory clarity and eliminate the ERISA litigation abuse that is turning benefit plans into liability traps.” Mr. Aronowitz emphasized a number of areas where DOL can help employers have regulatory clarity, including (1) modernizing defined contributions plans to include alternative investments, such as private equity and cryptocurrency, (2) the fiduciary rule as applied to IRA rollovers, (3) plan forfeitures, and (4) cybersecurity to protect participants assets.
While we expect that EBSA will continue to pursue bad actors who mismanage retirement assets, Mr. Aronowitz emphasized the need to encourage employers to expand retirement and health care benefits to America’s workers through even-handed enforcement and regulatory guidance. Mr. Aronowitz noted that EBSA “will end the practice of open-ended investigations that go on for years” and will work with Congress “for legislative changes needed to end litigation abuse.” As we’ve previously discussed, at least in the short term, this desire to curb meritless ERISA fiduciary litigation may face headwinds from the Cornell University case discussed below.