The Employee Benefits Security Administration should examine a random sample of pension and retirement plans as well as plans that spark complaints.
An official at the U.S. Government Accountability Office makes that argument in a report comparing EBSA, an arm of the U.S. Department of Labor, unfavorably to the Internal Revenue Service.
EBSA and the IRS each use a staff of more than 380 investigators to oversee a universe of about 700,000 pension and retirement plans, according to GAO figures.
EBSA investigated 7,752 plans in the fiscal year that ended March 31, 2005, closed 3,978 civil and criminal investigations and received 985 voluntary compliance applications. The IRS closed 8,230 plan exams, made 39,864 determinations and received 1,707 voluntary compliance applications, the GAO reports.
The IRS has a systematic process for selecting ordinary plans for exams, while EBSA seems to rely heavily on complaints to choose exam targets, Barbara Bovbjerg, a GAO director, writes in a report summarizing GAO officials’ analysis of EBSA’s performance.
“Given the ratio of employee benefit plans to investigators, EBSA’s limited presence may create an incentive for fiduciaries or plan sponsors to take compliance lightly,” Bovbjerg writes.