Senate HELP leaders introduce bill to tighten EBSA investigation oversight

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INSIGHT Act for EBSA oversight

Highlights

Senators Bill Cassidy and Jim Banks introduced the INSIGHT Act to mandate annual EBSA investigation reports to Congress detailing origins, key dates, and unresolved cases over 36 months.
The bill would require EBSA to notify plan sponsors when the Department of Labor assists plaintiff attorneys, disclose related written agreements, and report annually to Congress on these activities.
Employer groups including the American Benefits Council, ERISA Industry Committee, and U.S. Chamber of Commerce support the legislation, which addresses concerns that 17% of probes initiated in 2017 lasted over four years.

Legislation targets investigation timelines

As announced by the Senate Committee on Health, Education, Labor, and Pensions, Chairman Bill Cassidy and Senator Jim Banks introduced the Investigation Status and Governance for Honest Transparency, or INSIGHT, Act to add transparency and accountability to the Employee Benefits Security Administration investigation process.

The measure is designed to address what the senators describe as unnecessary bureaucratic delays in EBSA probes of employers that provide benefits to U.S. workers. They say lengthy investigations can increase liability costs for plan sponsors and make it harder for employers to maintain retirement benefits.

Under the bill, EBSA would have to submit annual reports to Congress on enforcement investigations, including their origin, key dates, timeliness and, for cases lasting more than 36 months, explanations and estimated completion dates without disclosing identifying information. The legislation also would require EBSA to notify plan sponsors when the Department of Labor provides adverse assistance to plaintiff attorneys and to execute and disclose written agreements tied to that assistance, alongside an annual report to Congress on those agreements.

Employer groups back compliance changes

The proposal has support from several business and benefits organizations, including the American Benefits Council, the ERISA Industry Committee, the U.S. Chamber of Commerce, the Investment Company Institute, The ESOP Association and the Business Group on Health.

The lawmakers frame the bill around oversight of Title I of the Employee Retirement Income Security Act of 1974, which governs protections for workers, retirees and families in private retirement, health and other welfare benefit plans. EBSA is responsible for enforcing those protections.

Cassidy says the bill is intended to make the Department of Labor more effective in protecting retirement security by increasing transparency, preventing open-ended investigations and reducing bureaucracy. Banks says retirement savings should not be trapped in prolonged administrative processes and that the measure would help workers and plan sponsors gain more confidence that benefits are handled properly.

The push also draws on a May 2021 Government Accountability Office report cited in the announcement, which found that 17% of all investigations opened in 2017 were still open four years later. The statement also cites stakeholder complaints that some investigations lack clear direction and can leave plan sponsors facing repeated document requests, interviews and investigator questions for extended periods.

In our earlier article on the U.S. Treasury Department’s planned CFIUS process updates, we outlined efforts to streamline reviews while strengthening compliance and transparency in foreign investment screening. The changes included faster processing for certain allied investors, tougher enforcement of mandatory filings and non-notified transactions, and expanded coordination with partners alongside updates to the Outbound Investment Security Program.

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