The federal Employee Benefits Security Administration, which operates within the U.S. Department of Labor, recently updated its enforcement strategy, a move that most notably includes the removal of Employee Stock Ownership Plans from its list of enforcement priorities.

EBSA, which enforces employee benefits standards like Title I of ERISA, unveiled an “overhaul” of its national enforcement projects, according to Keith Sonderling, U.S. Deputy Secretary of Labor, who wrote about the development in a LinkedIn post.

Sonderling said the updates were designed to deliver an “even-handed, responsive approach” to investigations that would positively impact workers, retirees and their families. The agency oversees regulations impacting about 2.6 million health plans and more than 1 million private retirement and welfare benefit plans—affecting more than 156 million Americans.

In his post, Sonderling wrote that the changes were EBSA’s “most significant” enforcement shifts in years and aim to “increase broad-based employee benefit plan compliance, address abusive practices and bad actors, and deliver results that increase security for participants and beneficiaries.”

What are EBSA’s revamped priorities?

Among the changes, EBSA removed ESOPs as an enforcement priority, according to a press release. This follows a pledge by new EBSA Head Daniel Eronowitz, and more favorable reception of ESOPs by Congress in recent months.

EBSA will also reduce efforts to help workers find lost retirement accounts, owing to the 2022 establishment of the Retirement Savings Lost and Found Database, the statement said. While not an enforcement priority, EBSA will continue its “longstanding commitment to identifying” multiple employer welfare arrangement abuse.

The updated enforcement priorities include:

• cybersecurity
• mental health and substance use
• benefit distributions
• retirement asset management
• surprise billing
• criminal abuse of contributory benefit plans

“By recalibrating the areas our investigators focus on,” Sonderling said, “EBSA investigations will be more efficient, responsive and prioritize serious misconduct rather than minor foot faults.”

Source – https://hrexecutive.com/significant-changes-afoot-for-federal-employee-benefits-unit/