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November 18, 2003
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Good morning. I’m Ann Combs, Assistant Secretary for
the Employee Benefits Security Administration.
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EBSA is responsible for overseeing the 730,000 private
pension plans and 6 million private health and welfare plans governed by
ERISA – the Employee Retirement Income Security Act.
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These plans cover approximately 150 million workers and
their dependents and include assets of nearly $4 trillion.
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I’m proud to report that EBSA’s total monetary
results for 2003 exceeded $1.4 billion – an increase of nearly 60 percent
over 2002.
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EBSA is focused on leveraging its resources by targeting
those situations that present the greatest potential for harm.
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Demonstrating the positive effects of our targeting
efforts, last year EBSA saw an 18% increase in the number of civil cases
where violations were found and corrected.
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Of the more than 4,000 civil cases we closed last year,
69% resulted in recoveries for employee benefit plans.
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The most common violations that we continue to see
involve 401(k) plans.
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Typically, these are instances where a plan official
deducts workers’ 401(k) contributions from paychecks and either sends the
contributions to the plan late or not at all.
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Both of these scenarios typically occur when an employer
is having financial problems and looks to the workers’ retirement
contributions for unlawful financing.
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EBSA’s criminal investigations, conducted in
consultation with the U.S. Attorneys office, led to the indictment of 137
individuals last year for crimes related to employee benefit plans.
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One area in which we have conducted both civil and
criminal investigations is health care fraud.
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Promoters of fraudulent schemes continue to sell the
promise of inexpensive health insurance but later default on their
obligations, leaving a trail of unpaid health claims behind them.
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We recently achieved success against one such group of
promoters – namely, the Employers Mutual health plan - and were awarded a
$7 million judgment to help pay the defrauded workers’ health claims.
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In addition to our aggressive enforcement program, an
important element of our overall strategy is a renewed emphasis on
compliance assistance.
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EBSA is committed to providing employers, plan officials
and service providers with guidance and tools necessary for them to comply
with the law.
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Our most popular compliance assistance program is the
Voluntary Fiduciary Correction Program.
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In FY 2003, we received 240 applications for the VFC
Program – an increase of more than 300 percent over 2002. This dramatic
jump reflects the success of improvements we made to the program last year.
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EBSA also has a participant assistance program to respond
to individual inquiries.
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Last year, the Agency handled over 173,000 telephone,
mail, and web-based inquiries and recovered nearly $83 million in benefits
on behalf of workers through informal resolution of individual complaints.
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These inquiries also provide us with a valuable source of
investigative leads.
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As EBSA’s FY 2003 results demonstrate, we take our
mission to protect the health and retirement benefits of working Americans
very seriously.
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Strong enforcement of ERISA, combined with a solid
commitment to encourage and facilitate compliance with the law, will
continue to be the hallmarks of our Agency.
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