Performance Goal EBSA 4.3: Health Benefits and Retirement Security

Improve health benefits and retirement security for all workers.

Other Information:

The Secretary believes that a good job should provide access to a secure retirement and to adequate and affordable health coverage. However, for middle-class workers today, particularly in the wake of the historic losses to retirement savings and housing wealth in the financial crisis, retirement seems anything but secure. Many workers, especially low- and middle-income workers, continue to lack access to quality workplace retirement plans, and some of those who do have access to retirement plans save too little or do not participate at all. Similarly, as joblessness rises, the number of persons covered by employer-provided health insurance falls. Private-industry employers, especially small businesses, cannot afford the rising costs of providing health insurance coverage for their workers. The decline in unionization has also adversely impacted workers’ health and retirement benefits. Recognizing these realities, the Department is pursuing several priorities to improve retirement security, including: • Improving 401(k) plans by improving fee transparency; • Rooting out conflicts of interest; • Increasing access to sound unbiased investment advice; and • Trying to increase pension plan participation rates. The Employee Benefits Security Administration (EBSA) and the Pension Benefit Guaranty Corporation (PBGC) have developed strategies that will help realize these priorities and further the goal to improve health benefits and retirement security for all workers. EBSA is charged with protecting more than 150 million Americans covered by an estimated 708,000 private retirement plans, 2.8 million health plans, and similar numbers of other welfare benefit plans which together hold more than $5 trillion in assets. EBSA will implement an aggressive regulatory agenda and proactive enforcement, outreach, and education programs that are designed to protect the most vulnerable populations while ensuring broad compliance with the Employee Retirement Income Security Act of 1974 (ERISA) and related laws. The framework of health insurance reform legislation of 2010 potentially adds tens of millions of additional people to the health insurance marketplace. The legislation assigned significant new responsibilities to the Secretary of Labor. EBSA, with the Department of Health and Human Services and the Department of Treasury, will pursue over 25 regulatory initiatives that will make health insurance market reforms applicable to ERISAcovered health plans. EBSA will also: develop Multiple Employer Welfare Arrangements (MEWA) reporting and oversight requirements; design and conduct several health benefit studies; modify Information Technology systems to support data collection and reporting; develop and implement education, outreach and assistance programs; and develop and implement new enforcement strategies. The economy, and the Recovery Act, had a significant impact on EBSA’s operations, particularly its Participant Assistance program. Participant requests for assistance more than doubled in the past year. The recent passage of healthcare reform is also expected to substantially increase participant inquiries. To respond to these extraordinary increases, EBSA has hired additional benefit advisors to meet the rising demand for assistance that will likely continue well into FY 2012. Strengthened ERISA Protections -- The recent financial crisis and healthcare reform increased the need to enhance the availability and security of employer-provided retirement and health benefits. EBSA’s new regulatory agenda seeks to address these issues aggressively and directly supports the Department’s outcome goal to improve health benefits and retirement security for all workers. Through the ongoing review and refinement of EBSA’s regulatory program, the agency will strengthen ERISA’s protections by addressing deficiencies that have put workers’ benefits at risk. For example, the new agenda includes the implementation of a broader definition of “fiduciary” under ERISA. The current regulatory standards that define when a person is considered a fiduciary as a result of providing investment advice to an employee benefit plan were developed over 30 years ago. These regulations do not take into account the significant changes that have taken place in the financial industry and the delivery of investment advice services – limiting ERISA’s ability to protect employee benefit plans from financial advisers and asset appraisers that act imprudently. By subjecting a broader category of financial advisers and appraisers to ERISA’s strict fiduciary standards, the Department will help protect the interests of plans and participants by fostering the provision of quality, impartial advice and recommendations. The cornerstone of a strong regulatory program is a robust economic analysis and research capability. EBSA’s research program reflects the central thesis of shaping regulations that eliminate or reduce the hazards with the broadest and most serious consequences based on sound science. EBSA will conduct a number of research studies on economic issues relating to health insurance as required by health care reform legislation. The research program also helps EBSA to foster a culture that emphasizes continuous improvement in its regulatory and enforcement programs. Multi-Faceted Enforcement Program -- EBSA’s enforcement program contributes to achieving the goal to improve the health benefits and retirement security for American workers by: (1) targeting the most egregious and persistent violators; (2) protecting the most vulnerable populations while assuring broad-based compliance; and (3) establishing regular processes for evaluating the success of enforcement activities. EBSA seeks to correct violations of ERISA through an aggressive enforcement program integrated with an effective participant assistance program. The participant assistance program augments EBSA’s enforcement program and better leverages its limited resources by obtaining informal resolution to complaints prior to the need for more resource-intensive enforcement. In the criminal enforcement area, EBSA establishes collaborative enforcement relationships with other DOL, federal, state and local agencies to leverage limited resources. Outreach and Education -- EBSA’s outreach and education programs protect the most vulnerable populations, such as dislocated workers, by educating them about options to protect their retirement and health benefits when facing job loss. Recently enacted laws such as the Genetic Information Nondiscrimination Act (GINA), the Children’s Health Insurance Program Reauthorization Act of 2009 (CHIPRA), and the COBRA premium assistance provisions of the Recovery Act resulted in an increased demand for educational materials. In 2009, EBSA Benefit Advisors conducted over 1,500 outreach activities reaching over 170,000 individuals. Finally, EBSA will partner with worker and community-based organizations to identify violations and to educate workers, small businesses, and others about the requirements of ERISA, which EBSA believes is an effective way to create broad-based compliance. EBSA thus leverages its resources through the use of the Internet, social media, and partnerships with numerous organizations to reach targeted audiences. Insuring Pensions -- PBGC safeguards the retirement security of the American people by guaranteeing benefits for those covered by insured defined-benefit pensions. PBGC insures basic pension benefits of nearly 44 million American workers and retirees participating in more than 29,000 private-sector, defined-benefit pension plans. In FY 2009, PBGC paid nearly $4.5 billion in benefits to nearly 744,000 people. The recent economic conditions have had a direct impact on PBGC’s financial status, workload, and infrastructure. As a result of plan terminations and a drop in interest rates, the deficit for insurance programs PBGC administers nearly doubled from $11.2 billion at the end of FY 2008 to $21.9 billion at the end of FY 2009. The deficit remains a cause for concern and is a reflection of the long-term challenges confronting PBGC. However, PBGC remains capable of paying benefits to its participants for years to come. PBGC has three strategies that support the outcome goal to improve health benefit and retirement security for all workers: 1) safeguard the federal pension insurance system for the benefit of participants, plan sponsors, and other stakeholders; 2) provide exceptional service to customers and stakeholders; and 3) exercise effective and efficient stewardship of PBGC resources. Proficient management of the insurance, benefit, and asset management functions, and addressing information technology audit findings, are high priorities for PBGC.

Stakeholder(s):

• Workers


• ODEP: Supporting Agencies: Promoting Retirement Security -- ODEP, in partnership with the Social Security Administration and the Centers for Medicaid and Medicare Services, supports the work of EBSA and PBGC to improve health benefits and retirement security for workers with disabilities by promoting the adoption and implementation of effective policy and practice, such as the use of “Benefits Planning” for people with disabilities so that they can make informed decisions on how federal disability benefit programs may impact their health benefits and retirement security. WB also complements the efforts of EBSA and PBGC and will continue to promote financial literacy and education. This will involve education and outreach of a revised financial literacy curriculum, in English and Spanish, and collaborations with other DOL agencies to examine policies and to educate stakeholders on policies, laws, and regulations that yield inequitable outcomes for women in retirement.


• Social Security Administration


• Centers for Medicaid and Medicare Services

Indicator(s):

Indicator:1

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