The U.S. Department of Labor’s Employee Benefits Security Administration (EBSA) has released a memorandum outlining its enforcement priorities and guiding principles under the Employee Retirement Income Security Act of 1974 (ERISA). According to EBSA, these priorities and principles are designed to ensure that the agency’s enforcement is “fair, even-handed, responsive and focused.” The memorandum reflects an overall shift to prioritize enforcement actions related to violations of the duty of loyalty rather than prudence in the operation of employee benefit plans.
EBSA’s memorandum outlines the following general standards for the agency’s enforcement actions:
- Focusing enforcement on the most egregious conduct and significant harm, particularly criminal cases and civil investigations where there is direct evidence of disloyalty or impermissible conflicts of interest;
- Ensuring the agency does not regulate by enforcement and instead uses the notice-and-comment rulemaking process and sub-regulatory guidance to drive policy;
- Requiring proper review by senior agency officials of all significant enforcement activities; and
- Committing to timely and responsive enforcement.
Private-sector employers should periodically review their compliance with ERISA’s fiduciary requirements, including adherence to the duty of loyalty and avoidance of prohibited transactions involving impermissible conflicts of interest.
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