The Department of Labor’s Employee Benefit Security Administration (EBSA) enforces compliance with laws governing private sector retirement and welfare benefit plans.  The agency recently published its annual Fact Sheet highlighting its enforcement actions accomplished in fiscal year 2020.  Notably, EBSA recovered over $3.1 billion in direct payment to plans, participants and beneficiaries, and its criminal investigations led to the indictment of 70 individuals for crimes related to employee benefit plans. 

As an example of its enforcement action, EBSA issued a recent press release that serves as a good reminder about proper handling of participant contributions and how essential it is to ensure that participant contributions are used for the exclusive purpose for which they are withheld.  EBSA’s investigation revealed that a business owner withheld $32,317 in employee contributions from their paychecks but failed to remit said contributions to the 401(k) plan, and used the monies for his own company’s uses.  Further, the owner failed to remit a month’s worth of its employee’s pre-tax health plan contributions ($2,758) to the group health plan.  The owner was sentenced to 36 months in prison, 36 months of supervised release, and ordered to pay a $300 assessment and restitution in the amount of $640,638.

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