ERISA Enforcement

Example violations applicable to both pension and welfare plans include:

  • Failing to operate the plan prudently and for the exclusive benefit of participants;
  • Using plan assets to benefit certain related parties to the plan, including the plan administrator, the plan sponsor, and parties related to these individuals;
  • Failing to properly value plan assets at their current fair market value, or to hold plan assets in trust;
  • Failing to follow the terms of the plan (unless inconsistent with ERISA);
  • Failing to properly select and monitor service providers;
  • Taking any adverse action against an individual for exercising his or her rights under the plan (e.g., being fired, fined, or otherwise being discriminated against);
  • Failure to comply with ERISA Part 7 and the Affordable Care Act (welfare plans only).

EBSA also conducts investigations of criminal violations regarding employee benefit plans such as embezzlement, kickbacks, and false statements under Title 18 of the U.S. Criminal Code. Prosecution of these criminal violations is handled by U.S. Attorneys' offices, see Criminal Enforcement News Releases. Title 18 contains three statutes which directly address violations involving employee benefit plans: (1) Theft or Embezzlement from Employee Benefit Plan (18 U.S.C. Section 664); (2) False Statements or Concealment of Facts in Relation to Documents Required by the Employee Retirement Income Security Act of 1974 (18 U.S.C. Section 1027); (3) Offer, Acceptance, or Solicitation to Influence Operations of Employee Benefit Plan (18 U.S.C. Section 1954).

ERISA also contains criminal provisions, including:

  • Section 411, Prohibition Against Certain Persons Holding Certain Positions;
  • Section 501, Willful Violation of Title I, Part 1;
  • Section 511, Coercive Interference. Persons convicted of violations enumerated in section 411 are subject to a bar from holding plan positions or providing services to plans for up to 13 years;
  • Section 519, Prohibition on False Statements and Representations. Persons shall not make false statements in connection with the marketing or sale of a Multiple Employer Welfare Arrangements (MEWA).

Decisions to seek criminal action turn on a number of factors, including:

  • The egregiousness and magnitude of the violation;
  • The desirability and likelihood of incarceration both as a deterrent and as a punishment;
  • Whether the case involves a prior ERISA violator.