Employee Benefits Security Administration: Enforcement Efforts to Protect Participants’ Rights in Employer-Sponsored Retirement and Health Benefit Plans

What GAO Found

The Department of Labor’s (DOL) Employee Benefits Security Administration’s (EBSA) enforcement focuses on encouraging retirement and health plans to comply with the Employee Retirement Income Security Act of 1974, as amended, and restoring benefits that were improperly withheld from plan participants. To identify violations, EBSA investigates benefit plans and their service providers. Over two-thirds of investigation leads are identified by EBSA staff. EBSA prioritizes investigating cases that may result in large recoveries or affect many participants, such as restored retirement plan contributions or payment for incorrectly denied medical claims. When agreement cannot be reached, investigators can refer civil cases to DOL’s Office of the Solicitor for civil litigation. Criminal cases are referred to Department of Justice. In fiscal year 2020, almost 84 percent of investigations were civil and more than 16 percent were criminal, resulting in over $3 billion in payments to participants and plans.

EBSA uses a range of strategies to improve its investigative processes and seeks to ensure enforcement quality through training and oversight. For example, EBSA makes efforts to target investigations for greater impact, such as a 2013 change to prioritize cases with the potential to affect many participants and recover significant assets. As EBSA pursued more complex and technical investigations, the number of closed cases decreased, while monetary recoveries increased (see figure). To ensure investigation quality, EBSA provides training, documents procedures, and reviews open and closed cases to evaluate whether investigation procedures have been followed.

Number of EBSA Investigations Closed and Monetary Recoveries, Fiscal Years 2011-2020

The COVID-19 pandemic created a number of immediate and long-term challenges for EBSA and benefit plans. For example, according to stakeholders, plans were initially concerned about how to implement provisions in the Families First Coronavirus Response Act and the CARES Act, but those concerns were addressed as the agency issued FAQs and notices. Similarly, EBSA officials reported that court closures temporarily slowed criminal cases, but as virtual hearings increased, litigation resumed. Stakeholders and EBSA officials also described potential long-term challenges, including difficulties locating the many participants who may have left a job due to the pandemic and may be unaware they left behind retirement funds.

Why GAO Did This Study

Millions of Americans rely on employer benefits for their health care and future financial security. Private sector retirement plans are a key source of income for many retirees and employer-sponsored group health plans cover over one-half of all Americans. Consequently, effective oversight and enforcement are critically important to ensure the integrity of the private employee benefit system, especially in light of the economic and health effects of COVID-19 on American workers and their families. EBSA is charged with protecting the rights of participants in employer-sponsored benefit plans. As of fiscal year 2020, this included about 154 million participants in 722,000 retirement plans and 2.5 million health plans with combined assets of over $10.7 trillion.

This report examines (1) how EBSA manages its enforcement process, (2) EBSA’s strategies to improve investigative processes and ensure enforcement quality, and (3) the immediate and long-term challenges of COVID-19 for EBSA and private sector retirement and health plans. GAO analyzed EBSA data and documents; and federal laws, regulations, and guidance, including the CARES Act and the Families First Coronavirus Response Act. GAO interviewed officials from EBSA’s national office and three regional offices, selected for variation in investigations, and locations as well as stakeholders from nine organizations knowledgeable about benefits compliance requirements, the employer-sponsored benefit industry, and participants’ benefit plan experiences.

For more information, contact Tranchau (Kris) T. Nguyen at (202) 512-7215 or nguyentt@gao.gov.

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    In U.S GAO News
    The Navy's schedule for constructing the first submarine of the new Columbia class is threatened by continuing challenges with the computer-aided software tool that Electric Boat, the lead shipbuilder, is using to design the submarine. These challenges will likely impede construction because the shipbuilder is late in completing design products used for building the submarine. To ensure construction begins on schedule, the Navy modified its design contract with Electric Boat to include an option for constructing the first two submarines and requested sufficient authority from Congress for fiscal year 2021 to exercise it. Navy officials stated, however, that the Navy's budget request is lower than its current cost estimate, and it is not informed by an independent cost assessment. As a result, the program will likely need more funding to reflect the increased estimate. Quality problems with supplier materials caused delays during early construction. These quality problems included missile tubes (depicted below) with defective welds. As the shipbuilders expand outsourcing to suppliers, quality assurance oversight at supplier facilities will be critical for avoiding further delays. Quad Pack of Four Submarine Missile Tubes However, the Navy has not comprehensively reassessed when to seek additional inspections at supplier facilities that could better position it to identify quality problems early enough to limit delays. The Navy plans to invest about $128 billion in 12 Columbia class nuclear-powered ballistic missile submarines. The shipbuilders will construct the Columbia class at the same time as the Virginia class attack submarines. They plan to rely on materials produced by a supplier base that is roughly 70 percent smaller than in previous shipbuilding booms. Congress included a provision in statute for GAO to examine the program's status. This report assesses the Navy's efforts to complete the design for the lead Columbia class submarine and actions the shipbuilders and the Navy have taken to prepare for construction and ensure the lead submarine is delivered according to schedule and quality expectations. GAO assessed Navy and shipbuilder design progress against cost and schedule estimates, reviewed documents, and interviewed officials about supplier readiness and quality assurance. This is a public version of a sensitive report that GAO issued in November 2020. Information that the Department of Defense (DOD) deemed sensitive has been omitted. GAO recommends that the Navy (1) provide Congress with updated cost information, (2) include information on supplier readiness in its annual report to Congress, and (3) reassess when to seek additional inspections at supplier facilities. DOD concurred with the recommendations but disagreed with some of the report's details. GAO incorporated DOD's comments as appropriate and maintains the validity of the findings, as discussed in the report. For more information, contact Shelby S. Oakley at (202) 512-4841 or oakleys@gao.gov.
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  • Nuclear Weapons: NNSA Should Further Develop Cost, Schedule, and Risk Information for the W87-1 Warhead Program
    In U.S GAO News
    The National Nuclear Security Administration (NNSA) did not consider cost estimates in early major design decisions for the W87-1 warhead because it was not required to do so, but NNSA has since changed its guidance to require that cost be considered, according to a May 2019 NNSA review of program documentation. The design decisions that remain for features that would achieve either minimum or enhanced requirements for the W87-1 could affect cost, according to NNSA officials (see table). We found, however, that NNSA did not yet have study plans for assessing the costs and benefits of the remaining decisions consistent with best practices as detailed in NNSA's analysis of alternatives business procedure. NNSA does not require and only recommends that programs such as the W87-1 follow these best practices. By directing the W87-1 program and future weapons programs to follow best practices for design studies, or to justify and document deviations, NNSA would have better assurance that design studies apply consistent, reliable, and objective approaches. NNSA Cost Estimates for W87-1 Warhead Design Variations That Meet Minimum and Enhanced Requirements, as of December 2018 (Dollars in billions) W87-1 design variations Cost estimate rangea Design includes features that meet minimum safety and security requirements 7.7 - 13.3 Design includes enhanced safety and security features 8.6 - 14.8 Difference between the above estimate ranges 0.9 - 1.5 Source: National Nuclear Security Administration (NNSA) documentation | GAO-20-703 aThe cost ranges reflect low and high estimates for a single design variation. The ranges represent technical and production risk and uncertainty. It is not clear that NNSA will be able to produce sufficient numbers of pits—the fissile cores of the primary—to meet the W87-1 warhead's planned production schedule. Recent NNSA and independent studies have cast doubt on NNSA's ability to ready its two planned pit production facilities in time. If one facility is not ready to produce pits in the early 2030s, for example, NNSA would likely produce fewer weapons than planned, according to GAO's analysis of NNSA plans. We were unable to fully assess the extent to which the two pit production facilities will be ready to produce pits for the W87-1 because NNSA's plutonium program—which is managing the facility readiness efforts—has not yet completed an integrated schedule for the overall pit production effort. An integrated schedule is important, according to best practices, because it integrates the planned work, resources, and budget. An NNSA official stated that the program was building a schedule, but could not provide documentation that it would meet best practices. A schedule consistent with best practices would provide NNSA with better assurance that it will have adequate pits to meet planned W87-1 production. This is a public version of a classified report that GAO issued in February 2020. Information that NNSA or DOD deemed classified or sensitive has been omitted. The Department of Defense (DOD) and NNSA restarted a program in fiscal year 2019 to replace the capabilities of the aging W78 nuclear warhead with the W87-1. NNSA made key design decisions for this weapon from 2010 until the program was paused in 2014. NNSA estimated in December 2018 that the W87-1 would cost $8.6 billion to $14.8 billion, which could make it the most expensive warhead modernization program to date. NNSA plans to newly manufacture the entire warhead, including the two major nuclear components, called the primary and secondary, using facilities it is modernizing or repurposing. You asked us to examine plans for the W87-1 warhead. This report examines, among other things, the extent to which NNSA (1) considered cost estimates in prior design decisions for the W87-1 and the potential effects of remaining design decisions on program cost, and (2) will be able to produce sufficient numbers of key nuclear components to meet W87-1 production needs. GAO reviewed NNSA documentation on prior and remaining design decisions and preliminary cost estimates, reviewed warhead and component production schedules, and interviewed NNSA and DOD officials. GAO is making four recommendations, including that NNSA require programs such as the W87-1 to follow analysis of alternatives best practices when studying design options and that the plutonium program build an integrated schedule consistent with schedule best practices. NNSA generally agreed with the recommendations. For more information, contact Allison B. Bawden at (202) 512-3841 or bawdena@gao.gov.
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  • Attorney General William P. Barr Announces Updates on Operation Legend at Press Conference in Milwaukee
    In Crime News
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  • Former Army Green Beret Pleads Guilty to Russian Espionage Conspiracy
    In Crime News
     A former Army Green Beret pleaded guilty today to conspiring with Russian intelligence operatives to provide them with United States national defense information.
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