Employee Retirement Income Security Act Enforcement

Background

Judicial interpretations of ERISA provisions have limited the substantive rights of retirement plan participants and beneficiaries. Even when participants and beneficiaries can prove ERISA violations, courts have severely limited the remedies available, thus undermining participants’ and beneficiaries’ rights (for a discussion of alternative dispute resolution, see Chapter 12, Personal and Legal Rights). Moreover such decisions, combined with the Department of Labor’s limited resources, have compromised the agency’s ability to enforce the act effectively, thereby endangering the health of many ERISA plans. After a lengthy administrative regulatory process, the department has at last finalized revised benefit claims regulations.

Employee Retirement Income Security Act Enforcement: Policy

Strengthening enforcement

In this policy: Federal

The DOL should strengthen enforcement under the ERISA. This may require better and more productive use of resources, additional funds, strengthened audit procedures, and regulatory actions that assist participants and beneficiaries in securing their benefits and protecting their rights. In particular the DOL should interpret and enforce the revised benefit claims regulations so that participants and beneficiaries can receive quickly and efficiently the benefits to which they are entitled.

Public education and information

In this policy: Federal

The DOL and other agencies should improve their efforts to educate plan members through publication of easy-to-understand, culturally and linguistically appropriate pamphlets; public service announcements; and other educational efforts.

Private rights of action

In this policy: Federal

Congress should enhance private rights of action under ERISA to supplement the DOL’s limited ability to monitor the benefits system.

Employee remedies

In this policy: Federal

Remedies under ERISA should be improved so employees can recover all losses due to ERISA violations.

Reporting and disclosure

In this policy: Federal

Comprehensive reporting and disclosure requirements must be maintained and enforced. Mandated disclosures, reports, and notices should be provided to participants and beneficiaries in a form that comports with their preferences, is private and secure, adequately conveys important information about retirement plan rights, promotes actual receipt of benefits, and is preserved and accessible decades later. Policymakers should consider setting mandatory penalties for failure to provide required information on plan finances to plan participants.

Attorney’s fees

In this policy: Federal

ERISA should be amended to require the award of mandatory attorney’s fees in successful fiduciary and benefits claim cases.

ERISA should be amended to provide that courts may, at their discretion, award attorney’s fees for work performed during the administrative review process.

Court review

In this policy: Federal

A court reviewing a disputed ERISA case should examine the relevant contracts and documents for itself (that is, review the case de novo) and not defer to the findings of the plan administrator, who may have an inherent financial conflict of interest.

Alternative dispute resolution

In this policy: Federal

The DOL should explore alternative dispute resolution forums for those claimants who otherwise would lack adequate remedies.