House Committee Advances Legislation to Increase Transparency in Employee Benefits Investigations

Strategic Insights -

The House Education and Workforce Committee has advanced the EBSA Investigations Transparency Act, a legislation aimed at addressing concerns from employers, plan sponsors, and nonprofits over lengthy and burdensome investigations by the Employee Benefits Security Administration (EBSA). The bill, championed by House Republican Conference Chairwoman Lisa McClain, seeks to provide transparency and accountability in EBSA's oversight process. The legislation requires EBSA to provide detailed updates and timelines during investigations, report key metrics to Congress, and ensure that enforcement actions are conducted fairly and efficiently.

Key Takeaways:

  • The EBSA Investigations Transparency Act would require EBSA to provide detailed updates and timelines during investigations, addressing concerns over lengthy and burdensome investigations.
  • According to the Government Accountability Office (GAO), 17% of all investigations opened in 2017 were still open four years later, highlighting the need for reform.
  • Employers, plan sponsors, and nonprofits have reported facing investigations that can drag on for years without clear timelines or communication, creating uncertainty that harms workers and retirees.
  • The bill would shine a light on excessively long Department of Labor audits of ERISA plans by improving disclosure and strengthening accountability.
  • The American Benefits Council strongly supports the legislation, citing its importance in restoring trust and predictability in EBSA's oversight process.

Statistics:

  • 17% of all investigations opened in 2017 by EBSA were still open four years later (GAO report, May 2021)
  • Investigations often appear without a clear purpose, trapping plan sponsors in endless document requests, interviews, and investigator questions (Plan sponsor reports)
  • The EBSA Investigations Transparency Act aims to reduce the uncertainty and expense caused by lengthy investigations, benefiting workers and retirees

Sources:

  • Release by the office of Michigan Rep. Lisa McClain
  • Education and Workforce Committee Blackboard, Committee on Education and the Workforce – Republicans
  • Written statement by Lynn Dudley, Senior Vice President, American Benefits Council
  • May 2021 Government Accountability Office (GAO) report