Pension PlansStronger Labor ERISA Enforcement Should Better Protect Plan Participants Gao ID: HEHS-94-157 August 8, 1994
The Department of Labor's Pension and Welfare Benefits Administration (PWBA) is responsible for enforcing provisions of the Employee Retirement Income Security Act of 1974 (ERISA), the federal program to protect an estimated 200 million participants and beneficiaries of private pension and welfare plans, as well as the $2.5 trillion in assets held by those plans. A review of Labor's enforcement program shows improvements since 1986, but also the need to strengthen enforcement by taking steps to ensure maximum use of investigative resources. PWBA has never evaluated its current enforcement strategy; such an evaluation is needed to determine whether PWBA is focusing on the right issues and whether the strategy produces the greatest results. In addition, PWBA has done little to assess the effectiveness of computer targeting programs developed to systematically select pension and welfare plans for investigation of potential fiduciary violations. The enforcement program also can be strengthened by increasing the use of penalties authorized by ERISA to deter plans from violating the law.
GAO found that: (1) DOL could strengthen its enforcement program by maximizing the use of its investigative resources and increasing the use of authorized penalties; (2) the Pension and Welfare Benefits Administration (PWBA) cannot determine whether it is sufficiently prioritizing its enforcement actions or whether its allocation formula is effective because it has not evaluated its enforcement strategy; (3) PWBA investigators may not be targeting the pension and welfare plans that are in possible violation of the act because PWBA has not evaluated, tested, or corrected the procedural weaknesses in its computer targeting programs; (4) PWBA lacks the staff and resources necessary and does not routinely follow up on Internal Revenue Service (IRS) referrals so that it can take appropriate legal action and impose penalties against those firms that do not comply with ERISA fiduciary requirements; and (5) PWBA needs to determine whether additional administrative guidance and legal changes are needed to enhance PWBA penalty enforcement.Recommendations
Our recommendations from this work are listed below with a Contact for more information. Status will change from "In process" to "Open," "Closed - implemented," or "Closed - not implemented" based on our follow up work.Director: Team: Phone: