Pension Plans: Stronger Labor ERISA Enforcement Should Better Protect Plan Participants
HEHS-94-157
Published: Aug 08, 1994. Publicly Released: Aug 08, 1994.
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Highlights
GAO reviewed the Department of Labor's (DOL) enforcement of the Employee Retirement Income Security Act, focusing on the DOL: (1) enforcement strategy; (2) methodology for targeting pension and welfare plans for investigation; and (3) use of penalties to increase compliance.
Recommendations
Recommendations for Executive Action
| Agency Affected | Recommendation | Status |
|---|---|---|
| Department of Labor | The Secretary of Labor should direct the Assistant Secretary for Pension and Welfare Benefits to evaluate the significant issue strategy to determine whether: (1) financial institutions and service providers continue to be the issue areas with the greatest potential for achieving maximum ERISA enforcement results; and (2) 40 percent is the resource allocation formula that will provide the greatest enforcement results or whether the formula should be tailored for each area office. |
Closed – Not Implemented
Labor agreed that its ERISA enforcement program should maximize the use of resources but generally disagreed with many of the recommendations. Labor said that its strategy and resources for computer targeting leverage enforcement are extremely limited in view of the large universe of participants and plans covered by ERISA. Labor has not disclosed the changes it might implement in its targeting programs.
|
| Department of Labor | The Secretary of Labor should direct the Assistant Secretary for Pension and Welfare Benefits to begin testing the revised computer targeting programs as soon as possible. If PWBA opts to test each individual program using the same criteria described in a September 30, 1993, letter to the Assistant Secretary, PWBA should: (1) randomly select plans for testing so results can be projected and programs properly validated; and (2) use a formula to set a sample size that will require less calendar and staff time to test each program. PWBA should also test the feasibility of using multivariate analysis to target plans for investigation. |
Closed – Implemented
Labor used the latter part of fiscal year 1994 to consider changes to its approach to testing the computer targeting programs. Labor has not disclosed the changes it might implement in its targeting programs.
|
| Department of Labor | The Secretary of Labor should direct the Assistant Secretary for Pension and Welfare Benefits to increase the use of penalties authorized by ERISA by establishing procedures to routinely review referrals of potential reporting violators from IRS service centers and using decentralized legal staff to help assess prohibit transaction penalties when warranted. PWBA should also determine whether additional administrative guidance, changes to the law, or both are needed to remedy confusion associated with the penalty and enhance PWBA penalty enforcement. |
Closed – Not Implemented
Labor agreed that its ERISA enforcement program should maximize the use of resources but generally disagreed with many of the recommendations. Labor said that its strategy and resources for computer targeting leverage enforcement are extremely limited in view of the large universe of participants and plans covered by ERISA. Labor also said that recent and anticipated changes to the use of field office staff should improve the program.
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Fines (penalties)Funds managementInformation systemsInternal controlsInvestigations by federal agenciesLaw enforcementPensionsWelfare benefitsLitigationPension plan