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The goals and measures contained in EBSA’s Annual Performance Plan for
FY 1999 supported those contained in the EBSA FY 1997 - 2002 Strategic Plan and
fall under the Department’s 2nd strategic goal-- A Secure Workforce.
EBSA’s primary mission is to protect the pension, health and other
employee benefits of the over 150 million participants and beneficiaries in
private sector employee benefit plans in excess of 6 million plans and $4.3
trillion in assets. Through its program, EBSA safeguards and promotes the
economic security of workers and families. To accomplish this, EBSA has
established the following agency goals:
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Deter and correct violations of the relevant statutes. EBSA deters
and corrects violations of the relevant statutes by identifying civil
violations and achieving appropriate correction in a cost- effective manner
(i.e. voluntary compliance, administrative proceedings or federal court
action); detecting, investigating and referring criminal violations to
prosecutorial authorities; ensuring that annual reports are filed timely and
accurately; and ensuring that audits of employee benefit plans comply with
professional standards.
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Facilitate compliance by plan sponsors, plan officials, service
providers and other members of the regulated community. EBSA facilitates
compliance through the timely issuance of advisory opinions, exemptions,
regulations, compliance guides and other issuances designed to assist the
regulated community in understanding and complying with their responsibilities
under the law, while removing unnecessary impediments and protecting the rights
and benefits of participants and beneficiaries. These efforts are supplemented
by EBSA participation in conferences, symposia, and programs designed to expand
an understanding of ERISA’s compliance requirements.
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Assist workers in understanding their rights and protecting their
benefits. EBSA assists workers in understanding their rights and protecting
their benefits by disclosing plan documents; developing publications, news
releases, and other educational materials which inform participants of their
rights under Federal law; assists in the development of amicus curiae
briefs to further participant rights and benefits; and maintains a nationwide
participant assistance program which provides written and telephone responses
to participant problems and inquiries.
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Encourage the growth of employment-based benefits. As one of the
principal agencies with responsibility in the area of pension, health and other
employee benefits, EBSA plays a leadership role in the development of
retirement, health and employee benefits policy. EBSA discharges its
responsibilities in this area in a variety of forms including, but not limited
to, maintaining an active research program; continuing its educational outreach
efforts to help plan sponsors and participants understand their rights and
obligations as well as the importance of and options for retirement savings and
health care benefits; assisting the Administration, other Federal agencies
(e.g. the Departments of Treasury and Health and Human Services, the Internal
Revenue Service, and the Pension Benefit Guaranty Corporation, among others)
and the Congress in the development and/or review of legislative initiatives
affecting employee benefits.
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FY 1999 was the first year for reporting specific performance measures under
the Government Performance and Results Act (GPRA). During FY 1998, baseline
measures were established in which to compare our FY 1999 results. EBSA met or
exceeded its performance goals in 10 of 11 instances, with the exception being
exemption determination processing. With respect to exemption determination
processing, there exists mitigating circumstances that will be delineated later
in the report.
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Goal - Increase by 2.5% the number of closed investigations of employee
pension and health benefit plans where assets are restored and prohibited
transactions corrected.
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Results - The Department closed 958 investigations of employee pension
and health and benefit plans where assets were restored, an increase of 56%
over FY 1998 (Figure 1). In addition, 389 cases were closed where prohibited
transactions were corrected, an increase of 62% over FY 1998.
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Indicator - Increasing the number of cases with fiduciary results
demonstrates the Department’s success in protecting plan assets. In other
words, where plan assets have been endangered by an imprudent act on the part
of the fiduciary or have been otherwise misused, the Department seeks to have
the transaction corrected to minimize potential loss or to have the plan made
whole through the restoration of assets.
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Analysis - The Department exceeded its FY 1999 performance goals. More
importantly, in FY 1999, the Department increased by 26% over FY 1998, the
number of limited investigations converted to fiduciary cases. In addition,
cases closed with fiduciary results were up 44% over FY 1998, a primary
strategy to achieving our goal.
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 In FY 1999, the Department restored approximately $494 million to benefit
plans as a result of its investigative efforts. Assets that, in the absence of
investigative efforts, would have been lost to participants and beneficiaries.
This is an increase of approximately 45% since 1995. Because of the volatile
nature of recoveries, past performance is not indicative of future performance
in any given year nor is the trend constantly increasing. However, over the
period of several years, the trend has generally been upward.
Strategies - During FY 1999, regional offices employed more effective
targeting techniques to increase the number of cases converted from limited
review investigations to fiduciary investigations in which possible fiduciary
or criminal violations have been identified. Some offices requested special
computer generated targeting runs designed to identify specific types of plans
(e.g., ESOPs), or investment/asset categories (e.g., those holding real
estate/mortgages or those where assets have been transferred to other plans).
Other offices went directly to financial institutions to assist them in
identifying plans which may have a delinquent contribution problem or which may
have been abandoned by responsible plan officials. In addition, the National
Office took a proactive role in identifying plans which may had delinquent
contribution issues and supplied field offices with computer runs identifying
likely targets.
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Goal Assessment & Plans - In FY 2000, EBSA will maintain this goal
but will set a more ambitious target given our recent experience. In addition,
to protect against irregular fluctuations, we will utilize a two-year rolling
average. In FY 2001, we will begin reporting separate and distinct measures for
pension and health enforcement to reflect our increasing responsibilities in
the health related enforcement arena.
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Expand Pension Coverage, Particularly Among Women,
Minorities, and Small Business Workers.
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Goal - Increase by 1% the number of workers who are covered by a
pension plan sponsored by their employer, particularly women, minority, and
workers in small businesses.
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Result - The number of private wage and salary workers in pension
programs increased from 45.1 million in 1997 to 47.6 million in 1998, an
increase of 5% (Figure 2). With respect to those groups where pension coverage
has been historically lower, the increase among women was 5%, among minorities
6%, and among workers in small businesses 8%.
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 Indicator
- The number of private wage and salary workers in pensions
programs. Improving the financial security of Americans during their retirement
years is a major Secretary priority. More specifically, expanding pension
coverage to those Americans who have historically experienced low pension
coverage is of particular concern.
Analysis - The data suggests that the Department was successful in
achieving a primary performance goal that directly improves the lives and
conditions of American families-- ensuring a better security in retirement.
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Strategies - Many factors contribute to the expansion of pension
coverage such as, the structure and health of the economy (e.g. level of
employment and economic growth, sectoral shifts in economic activity) and
demographics (aging population, increasing numbers of women and minorities). In
addition to these external factors, the Department also contributes through
aggressive educational strategies such as the Retirement Savings Education
Campaign and Partnerships, targeted public service announcements, promotional
cards in tax returns, 800 telephone line, interactive web sites and videos for
small businesses to name a few. The Department will continue to aggressively
educate our customers regarding the importance of retirement planning,
particularly participation in pension plans, and anticipates continued success
in expanding pension coverage.
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Goal Assessment & Plans - In FY 2000, we will maintain this goal.
We will continue to aggressively pursue education and outreach, in general, and
will continue targeting those groups who have historically shown a lower rate
of pension coverage -- women, minorities, and workers in small businesses . As
a result, we anticipate continued expansion of pension coverage.
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Goal - Promulgate final health benefit and regulatory guidance,
including technical advice, implementing the Health Insurance and
Accountability Act of 1996 (HIPAA), the Newborns’ and Mothers’
Protection Act of 1996, and the Mental Health Parity Act of 1996.
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Result - The Department made significant progress during FY 1999
by issuing interim final regulations for the above referenced laws. In
addition, to ensure a coordinated effort with the other federal agencies
responsible for administering their respective portion of the laws, the
Department entered into a Memorandum of Understanding with the Departments of
Health and Human Services and the Department of Treasury. The Department also
launched a Health Benefits Education Campaign and issued new and updated health
care publications.
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Indicator - Progress is checked via the Federal Register. The Congress
passed landmark legislation in 1996 governing certain health benefit
entitlements that impact virtually all people receiving health benefits under
ERISA plans. The Department was assigned regulatory, interpretive, enforcement,
and disclosure responsibilities under these laws.
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Analysis - These new laws establish federal requirements for virtually
all of the nations private health benefits programs. This initial activity,
while not quantified, establishes the foundation for addressing important
issues like improved portability and continuity of health insurance coverage
provided in connection with employment, preexisting conditions exclusions,
special enrollment rights, and prohibition of discrimination against
individuals based on health status related factors.
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Strategies - The Department developed a compliance guide checklist for
enforcement personnel and conducted a limited pilot to ascertain initial
compliance with the new health care laws. We are currently analyzing the
results of the pilot and will further tailor our enforcement efforts, as
appropriate, based on the results.
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With respect to customer assistance, the Department updated a reference
booklet, entitled “Questions and Answers: Recent Changes in Health Care
Law”. The booklet contains questions and answers that address issues
raised by the interim rules under the Health Insurance Portability and
Accountability Act of 1996 (HIPAA). The booklet was designed to help employees
and employers understand their rights and obligations under HIPAA, as well as
the provisions of the Mental Health Parity Act of 1996, the Newborns’ and
Mothers’ Health Protection Act of 1996, and the Women’s Health and
Cancer Rights Act of 1998. The Department firmly believes that an informed and
knowledgeable public enables individuals to understand their rights under the
law and, when possible, to recover any benefits.
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Goal Assessment & Plans - The Department will not maintain this
goal but will begin reporting on its health initiative results as a separate
and distinct measure in FY 2001. The new measure and related performance goal
may be found in the Department’s revised Strategic Plan.
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During FY 1999, EBSA assessed civil penalties of more than $14.7 million.
The civil penalty assessment program was established in FY 1991 under
provisions of the Employee Retirement and Income Security Act (ERISA), sections
502(c)(2), 502(I), and 502(1). Collections of assessed penalties for the past
five years, including interest and other charges, are as follows:
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FY 1995: $5,463,000
FY 1996: $13,142,000
FY 1997: $11,285,000
FY 1998: $12,384,000
FY 1999: $13,071,000
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The program-specific measure of civil cases opened decreased in FY 1999 from
5,858 to 4,081 after steadily increasing for the preceding four years. In FY
1999 the investigative emphasis was altered to improve the selection of cases
for investigation. While this transition resulted in fewer cases being opened,
the benefit of this change, as previously indicated in the report, increased
the number of cases closed with fiduciary results by 44% , or 453 cases from
1,029 in FY 1998 to 1,482 in FY 1999. There was also a corresponding increase
of 26% in the number of cases that were converted to fiduciary investigations
from limited investigations from 1,575 in FY 1998 to 1,991 in FY 1999.
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In FY 1999, the number of civil cases referred for litigation increased to
178, compared to 164 in the prior year and up from 113 in FY 1995. Assistance
to participants continues to markedly increase benefit recoveries for plan
participants. In FY 1999, benefit recoveries totaled $74 million compared to
$42 million in FY 1998, up from $17 million in FY 1995. While our increase in
Enforcement staff and Pension Benefit Advisors during this period may be
partially responsible for the increase, we are also achieving efficiencies as a
result of technological improvements such as our automated service for the
distribution of information (i.e. pamphlets). Pension Benefit Advisors are now
spending less time responding to simplistic information requests and more time
actually resolving complex benefit issues. We anticipate this trend to continue
as we reap the full benefits of automation and a seasoned, fully-trained staff.
EBSA also included this measure into its FY 2000 Annual Performance Plan.
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The outputs for exemptions granted increased slightly over FY 1998. However,
the amount of time to process an exemption increased, which resulted in EBSA
failing to achieve one GPRA goal. The exemption program facilitates meritorious
investment transactions for pension plans which would otherwise be prohibited
under ERISA. During FY 1999, approximately 36 of the 198 exemption cases closed
were highly complex, requiring careful attention to develop appropriate
safeguards and conditions to address any potential conflicts of interest. Some
of these cases were well over one year old. Continuing to eliminate the more
complex cases from the inventory is a necessary step which will hopefully yield
results in reduced average processing time for the coming years. In fact, the
remaining number of aged, complex cases may still have an adverse impact on our
processing time in FY 2000. However, we are attempting to mitigate this impact
and anticipate that by FY 2001, the benefits of eliminating the aged cases will
result in significant improvement in processing time.
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In FY 2000, EBSA will maintain several enforcement goals but will set more
ambitious targets given our recent experience. In addition, to protect against
irregular fluctuations, we will utilize a two-year rolling average (e.g. Goals
2.3 and 2.5). In FY 2001, we will begin reporting separate and distinct
measures for pension and health enforcement to reflect our increasing
responsibilities in the health related enforcement arena (Goal 2.3). Further
details as to our adjustments may be found in the Department’s FY 1999
Annual Accountability and Performance Report as well as its FY 2000 and FY 2001
Annual Performance Plans.
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We will also continue to aggressively pursue education and outreach, in
general, and will continue targeting those groups who have historically shown a
lower rate of pension coverage -- women, minorities, and workers in small
businesses . As a result, we anticipate continued expansion of pension
coverage.
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EBSA has included a new goal to measure the results of our customer
assistance efforts. In FY 2000, we will begin measuring benefit recoveries as a
result of Pension Benefit Adviser assistance. In FY 1999, the Department had
benefit recoveries in excess of $62 million.
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Finally, in FY 2000, EBSA embarked on an initiative, in Partnership with the
Department, to improve its performance measures and to address performance data
validation and reliability. MRJ, a noted expert in the field of data validity
and results-based management, is assisting EBSA in transitioning from output to
outcome measures. Simultaneously, MRJ is working with EBSA management in
reviewing its internal data controls as a means for ensuring the most reliable
and accurate data to the extent practicable. We anticipate that FY 2001 will be
the first full year to benefit from this initiative.
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Goal Description
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Result
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| 1.1 Respond to all requests for plan
documents, annual reports and other information maintained for public
disclosure within an average of 10 working
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6.3 Days
Exceeded
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| 1.2 Provide timely assistance to
participants and beneficiaries. Respond to 90% of written requests within 30
days. Respond to 99% of telephone request by c.o.b. the next business day.
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99.21%
99.98%
Exceeded
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| 1.3 Provide policy and technical
assistance to the Office of the Solicitor necessary to the development of
Amicus Curiae Briefs within 10 days of the requested date for such assistance.
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10 Days
MET
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2.1 Ensure that no more than 3% of
the employee benefit plan annual 5500 filings are deficient.
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Deferred (1)
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2.2 Ensure that no more than 12% of
the 1999 employee benefit plan audits fail to comply with professional
accounting and auditing standards.
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Deferred
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2.3 Increase by 2.5% both the number
of closed investigations of employee pension and health benefits plans where
assets are restored (to 537) and the number where prohibited transactions are
corrected (to 241).
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AR - 958
PTs - 389
Exceeded
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2.4 Increase by 2.5% (to 610) the
number of fiduciary investigations closed where plan assets are protected from
mismanagement and risk of future loss is reduced.
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633
Exceeded
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2.5 Increase by .25% (to 15.92%) the
ratio of closed civil cases with corrected violations to total civil cases
closed.
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36.49%
Exceeded
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2.6 Increase by .25% (to 42.66%) the
ratio of criminal cases referred for prosecution to United States Attorneys or
to State prosecutors to total criminal cases.
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45.30%
Exceeded
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3.1 Promulgate final health benefit
regulatory guidance, including technical advice, implementing the Health
Insurance Portability and Accountability Act of 1996 (HIPPA), the
Newborns’ and Mothers’ Health Protection Act of 1996 and the Mental
Health Parity Act of 1996.
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Met
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3.2 Reduce response time for requests
for advisory opinions, technical guidance, and exemptions. (1) Acknowledge
requests within two weeks of receipt, (2) reduce exemption processing time by
3% a year (to 174), (3) and respond to requests for advisory opinions and
technical guidance within an average of 180 days.
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1. Met
2. 241
3. Met
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3.3 Develop small business regulatory
compliance guides no later than 180 days after the effective date of relevant
final regulation.
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N/A (2)
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4.1 Increase by 1% (to 45.5 million)
the number of workers who are covered by a pension plan sponsored by their
employer, particularly women, minority and workers in small businesses.
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47.6 Million
Exceeded
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4.2 A research program that is
responsive to developing issues and data needs.
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Met (3)
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Footnotes
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The goal, originally slated to
be measured in FY 1999, was deferred until FY 2002 pending
completion of the implementation of EFAST and resulting receipt
and analysis of the first year’s data. In addition, EBSA will
have implemented and addressed issues arising out of the revision
of the new Form 5500.
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No final regulations were issued
to trigger this particular requirement.
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EBSA completed studies in
several topical areas; The include: (1) Increases in the number of
individuals lacking health insurance and stubbornly low rates of
health benefit coverage at small businesses have heightened
interest in the relative effectiveness of alternative employer
health insurance purchasing mechanisms. EBSA completed a project
modeling such mechanisms' effectiveness and effect on health
insurance markets and coverage; (2) Another contract produced two
relevant research papers, one on self-insurance and another on
collective purchasing; (3) studying the implications of
alternative liability environments for decision making, and a
broader follow-up study of decision making processes, outcomes,
and their determinants; (4) gaps in pension coverage and threats
to retirement income adequacy --a study of the incidence,
determinants, and role of pre-retirement pension cash-outs, and
completed the first stage of a project to model lifetime pension
coverage given workers' expected career patterns; (5) published
the Private Pension Bulletin Number 8, a detailed statistical
report on pension plan participation and finances.
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