Council applauds House subcommittee for examining DOL overreach on retirement plan audits, litigation

Offers support for legislation to promote fair treatment of plan sponsors

WASHINGTON, DC – “The mission of the U.S. Department of Labor (DOL) is to protect American workers. However, the agency’s enforcement philosophy has diminished retirement security by making it more challenging and riskier for employers to offer a plan,” said Lynn Dudley, the American Benefits Council’s senior vice president, global retirement and compensation policy.

“We commend the U.S. House of Representatives Education and Workforce Subcommittee on Health, Employment, Labor and Pensions for holding a hearing today and taking a closer look at the agency’s posture toward retirement plan sponsors,” Dudley said.

The July 22 hearing examined two important areas of concern for the Council:

• Interminable plan audits: the DOL Employee Benefits Security Administration (EBSA) has been conducting extremely long audits of retirement plans, lasting as many as eight years, especially scrutinizing plan fiduciaries’ efforts to find missing participants. These audits have been marked by long delays, shifts in DOL personnel (requiring old ground to be covered again), and often overly broad requests for information. The audits are costly and burdensome, especially when the fiduciary gets new questions about factual issues from eight or more years ago.

• The Council strongly supports the EBSA Investigations Transparency Act (H.R. 2869), sponsored by Representative Lisa McLain (R-MI), which would enhance congressional oversight of DOL audit activity.

• Secret agreements with plaintiffs’ counsel: It has recently come to light that the DOL has been entering into secret agreements with plaintiffs to help them sue ERISA plan fiduciaries. This is obviously inappropriate and corrosive to the relationship between regulators and the regulated community.
• The Council strongly supports the Balance the Scales Act (H.R. 2958), sponsored by Representative Mike Rulli (R-OH), which would end the secrecy by requiring that a copy of any such agreement be disclosed to the employer, plan sponsor, or fiduciary impacted by the agreement. The bill also amends ERISA to affirm that the statute is intended “to promote, encourage, and facilitate the voluntary establishment and maintenance of, and contribution to, [retirement] plans.’’

“Workplace retirement plans cover more than 150 million Americans. Employers are proud to sponsor these plans voluntarily, despite a maze of regulations and the constant threat of litigation,” Dudley said. “The DOL should support plan sponsors in this mission. We look forward to working with Congress and incoming DOL staff to forge a more cooperative relationship moving forward.”

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