The Employee Retirement Income Security Act (ERISA) is a federal law that governs the management of health insurance plans and other benefits in the private sector, primarily those offered by employers to qualifying employees. The Department of Labor (DOL) is charged with oversight of the law. In addition to general requirements about providing plan information to participants, ERISA also establishes a fiduciary duty on those who administer plans. The intent of the law is to protect the interests of individuals enrolled in these benefit plans from misconduct by plan administrators. Criminal and civil penalties can result from wrongdoing, as you can see from the latest news in ERISA enforcement efforts.

Criminal investigations are on the rise: While criminal penalties are reserved for more egregious violations of ERISA standards, these cases are vigorously pursued by the DOL. According to the “Fact Sheet” covering enforcement and investigation efforts in 2014, criminal cases increased as compared to 2010. The 365 criminal investigations conducted by the DOL in 2014 represent a 30% increase over four years previous. At the same time, indictments and guilty pleas were lower.


Civil cases have also increased: The DOL’s focus on enforcing ERISA standards is evident in the rise of civil investigations dealing with plan assets and participant benefits. The department investigated almost 4,000 cases in 2014, which is a higher number than recent years – but still lower than 2002 where there were significantly more civil investigations. The DOL “Fact Sheet” revealed renewed efforts to increase enforcement in the civil arena through 2018.

Funds restored through investigations are lower: The total monetary benefits restored through the efforts of the DOL, both through criminal and civil investigations, is staggering. A total of $599.7 million was recovered, with $204.9 million of that amount restored to ERISA plan assets and participant benefits. In sum, 64.7% of civil investigations resulted in monetary recovery for plans, demonstrating how effective the DOL’s efforts can be in pursuing violations of employee benefit plan administration or other ERISA compliance issues.

ERISA offers incentives to employers who self-correct: The DOL encourages companies to come forward if they find reporting inconsistencies or other non-intentional violations of ERISA mandates. Of the almost $6 million in monetary funds recovered, $20.2 million was restored under the Voluntary Fiduciary Correction Program, which provides incentives to companies who self-correct and report their errors.

The criminal and civil repercussions that can result are significant for companies found in non-compliance with ERISA mandates. At the same time, it’s becoming increasingly difficult for business owners to stay on top of all legal requirements as they relate to benefits administration: Not only must companies comply with ERISA, but there’s a wide range of constantly-changing regulations that they must consider. Paypro is a provider of workforce management solutions and tools that streamline benefit administration and helps companies meet ERISA standards and other regulatory requirements. To learn more, please contact us to speak with one of our workforce management experts.