Enhanced Oversight Needed to Protect Private Pensions

Effective oversight of the private pension industry’s management of retirement assets is critical to ensuring the economic security of millions of workers, retirees, and their families. But changes brought about by the “Pension Protection Act of 2006,” and its effect on the investment service industry, further highlight the need for EBSA to re-examine its operations to enhance its capability to protect private pension plans.

The Employee Benefits Security Administration (EBSA) must re-examine its operations to enhance its capability to protect private pension plans, and the Department of Labor should implement a series of recommendations outlined in a new Government Accountability Office (GAO) report, (GAO-07-22).

In a letter I sent yesterday to Secretary of Labor Elaine L. Chao, I called attention to the GAO’s findings and expressed concerns that EBSA must adopt new procedures to protect approximately one-fifth of the United States retirement wealth invested in mutual funds and pension and retirement savings plans. EBSA is the primary agency responsible for protecting approximately 730,000 private sector pension and retirement savings plans with assets totaling roughly $4.9 trillion and covering over 100 million participants.

While the GAO reports that EBSA has taken actions to strengthen its enforcement program since GAO reported on its activities in 2002, there are areas that EBSA has not addressed and certain changes could be made to improve the program’s overall management.

The GAO report, available at http://www.gao.gov/new.items/d0722.pdf, recommends that the Secretary of Labor direct the appropriate offices in EBSA to: