▶ 0:16:14The subcommittee on health, employment, labor, and pensions will come to order. I note that a quorum is present. Without objection, the chair is authorized to call a recess at any time. Today's hearing is about protecting the retirement savings of American workers and shielding the employers who voluntarily maintain retirement savings plans from abusive governmental Employer sponsored retirement plans are the backbone of the American retirement.
▶ 0:16:45Private employers voluntarily sponsor more than 800,000 Orisa covered retirement plans holding more than 9 trillion in assets. More than 70 million workers and millions of former employees and retirees are covered by these plans. Savings rolled over from employer sponsored retirement plans also total more than half of the 15 trillion in IRA. Employers should be encouraged to maintain these plans.
▶ 0:17:15Due to the Biden Harris policies, inflation and the cost of living rose dramatically, throwing many Americans into financial jeopardy. Few people are more vulnerable to this kind of financial instability than Americans are working later in life without a chance to enjoy retirement. The Biden Harris administration punished employers for maintaining these plans.
▶ 0:17:38Specifically, the Employee Benefit Security Administration on also known as Visa ran burdensome and inefficient employee benefit plan investigations that lasted for years without repetitive document requests, staff turnover, and delayed findings. The Biden Harris playbook wasted the taxpayers money and the money of the employers under investigation.
▶ 0:18:03Endless and aimless investigations conducted by EPSA wasted precious time and resources and ultimately hurt the American savers. We will hear testimony today that EPSA has also abused the legal system and aided plaintist attorneys. The Department of Labor's Office of Inspector General announced in June that it will investigate EPSA's secret sharing agreements with lawyers such as class action planners law firms.
▶ 0:18:32EPSA's mission is to ensure the security of retirement, health, and other workplace benefits of American work, America's workforce and their families. Instead of upholding this mission, the Biden Harris administration use EPSA to deliberately attack the voluntary employee benefit system with endless and aimless investigations. Today, we will learn more about those practices and their efforts on workers and the employers who provide benefits to those workers.
▶ 0:19:01Members of our committee have proposed legislation legislative solutions to the problems we were hear about today. Representative Lisa Mlan has introduced the EPSA Investigations Transport Transparency Act and Representative Mike Roelly has introduced the Balance the Scales Act. I look forward to discussing these bills and other efforts to protect Orisa Plan participants and their benefit plans. With that, I yield to the ranking member for an opening statement.
▶ 0:19:32Thank you, Mr. Chairman, and thank you to all the witnesses for being here. I also want to welcome one of the witnesses, Mr. Banduchi, uh, for coming back to the committee. I know he served for many years on the Republican committee staff. So, I'll be interested to see what it's like on the other side. The Department of Labor's Employee Benefit Security Administration, or EPSA for short, is a vital agency charged with protecting workers hard-earned health and retirement benefits.
▶ 0:20:02EPSA oversees approximately 800,000 private retirement plans covering over 153 million people, 2.6 million health plans, and 514,000 other benefit plans. Many significant laws are within EPSA's jurisdiction and several more have been added in recent years. Yet, despite EPS's critical mission and growing responsibilities, its funding and staffing have not kept pace.
▶ 0:20:30EPSA has been essentially flatfunded for years, and the Trump administration's fiscal year 2026 budget only makes things worse by requesting 10 million less than last year's level. The administration is effectively proposing a further cut of 20 million by failing to extend bipartisan no surprises funding. Inadequate funding has resulted in steep declines in full-time employees at EPSA. We are incredibly fortunate to have Mr.
▶ 0:20:59Ali Kawir uh as one of our witnesses. Welcome, Mr. Kawir. Um this morning, he's worked at EPSA in various capacities for nearly 20 years. His testimony details how EPS's budget once supported over 960 employees and how the Trump administration recent budget would support just over 600. Clearly, EPSA is being asked to do far more with much less.
▶ 0:21:27But it is still delivering for workers and their families, protecting their benefits and putting money back in their pockets and is a good return on investment to high road employers and taxpayers. In fact, in fiscal year 2024, EPSA recovered almost $1.5 billion dollars in payments. In a time when federal workers are being unfairly targeted and fired by the Trump administration, it is even more important to recognize the value they provide to American taxpayers and our constituents.
▶ 0:21:57Every day, Americans get assistance from EPSA's benefit adviserss who help workers navigate the complex issues with their plans. They and all of EPSA's staff in DC and its regional and field offices deserve our respect and appreciation during what I'm sure has been incredibly challenging year for them and their families. I understand that today's hearing will focus on two bills that harm EPS's ability to do its job.
▶ 0:22:26Last year, committee Republicans opposed the Department of Labor's legally permissible yet rarely used common interest agreements in litigation. I say rare because as Mr. Guar notes in his testimony over the past 15 years there were only 12 such agreements. Let me repeat that. Over 15 years 12 such agreements out of over 31,000 investigations.
▶ 0:22:51Nevertheless, committee Republicans demanded that the department's inspector general look into these rare agreements and the IG agreed. Rather than waiting for the results of the IG investigation, they requested committee Republicans. The request today in this hearing is rushing to judgment, seemingly intent on advancing a one-sided bill that goes way beyond common interest agreements and severely limits EPS's ability to communicate with attorneys representing We all believe in efficiency and would be happy to
▶ 0:23:21work with the the majority to look at objective analysis of how we make the program more efficient for everyone, particularly employees. The other bill relates to EPSA's enforcement activities. We all share an interest in seeing that enforcement by federal agencies and completed in a timely and as I said efficient manner. That's in the best interest of all parties involved and should be nonpartisan bipartisan.
▶ 0:23:47If that's our shared goal and the best way to achieve it is to ensure EPSA has the funding, resources, and p and personnel necessary to do the its job and to wait for the IG's investigation. What doesn't accomplish that goal is bill to add to EPS's administrative burden and require them to produce a biased report that doesn't provide a complete picture of the AY's work. These bills don't solve problems. They create new ones and strike at the heart of EPS's mission.
▶ 0:24:16As we've seen from the devastation wrought in recent months by the so-called Department of Government Efficiency, Doge, and the catastrophic one big ugly law, our language, which will leave at least 10 million Americans without health insurance and cut over a trillion for Medicaid, undermining core government functions, does a disservice for the American people. We can and should do better and are willing to work in a bipartisan way if we really want to improve oversight. Thank you, and I yield back.
▶ 0:24:45I thank the ranking member. Pursuant to committee I thank the ranking member. Pursuant to committee rule 8C, all members who wish to insert written statements into the record may do so by submitting them to committee clerk electronically in Microsoft Word format by 5:00 p.m. 14 days after this hearing.
▶ 0:25:06Without objection, the hearing record will remain open for 14 days to allow such statements and other extraneous material noted during the hearing to be submitted for the official record. I will now turn to the introduction of our four distinguished witnesses. Our first witness is Mr. Goolbeck, a principal at Groom Law Group in Washington DC. Our second witness is Mr.
▶ 0:25:30Andy Bandushi, the senior vice president for retirement and compensation policy at the Orisa Indust Industry Committee in Washington DC. Our third M uh witness is Mr. Kowar, the founder and president of FCP LLC in Washington DC. And our last witness is Mr. Jim Bonham, the president and CEO for the ESOP Association in Washington DC.
▶ 0:25:59We thank the witnesses for being here today and we look forward to your testimony. Pursuant to committee rules, I would ask that you each limit your oral presentation to a threeminut summary of your written statement. As committee members have many questions for you, the clock will countdown for three minutes. Pursuant to committee rule 8D and committee practice, however, we will not cut off your testimony until you reach the five minute mark.
▶ 0:26:24I would also like to remind witnesses to be aware of their responsibility to provide accurate information to the subcommittee. I will first recognize Mr. Gumb Galumbuk Bick for your testimony. Mr. Gumbic.
▶ 0:26:39Good morning, Chairman Allen, uh, Ranking Member Dson, and members of the subcommittee. Thank you for the opportunity to testify today about the Balance the Scales Act, which will compel the US Department of Labor to do what it should have done for years, inform American citizens and businesses when it shares their confidential information with others. My name is Lars Golumbic and I'm a principal at Groom Law Group Chartered, a law firm specializing in employee benefits.
▶ 0:27:07I'm co-chair of our ORISA litigation group and I've been practicing uh in this area for nearly 25 years. Last year, in an ongoing lawsuit, my law firm uncovered concrete proof of what many had long suspected that the DO uses its authority to collect confidential information from American businesses, then surreptitiously supplies it to private plaintiffs attorneys under the guise of so-called common interest agreements.
▶ 0:27:33The federal district court in that lawsuit rightfully chastised the DO and the plaintist firm involved, Cohen Milstein, for their cozy relationship that enabled the DO to to, as the court put it, litigate in the shadows. Unfortunately, we've since learned that this was not just a one-time occurrence. Documents produced in response to at least one foyer request show that the DO secret arrangements have infected many other class action lawsuits over the years.
▶ 0:28:01These documents show the DO providing information to class action lawyers, coordinating on discovery and legal strategy and much more. The DO's actions circumvent important legal protections including FOIA's confidentiality and notice provisions, the rules governing litigation in federal court and the enforcement scheme Congress created within Orisa.
▶ 0:28:21The DO stomps on the scales of justice when it sidesteps these protections, handicapping plan sponsors, fiduciaries, and service providers trying to defend themselves in class actions while gifting lucrative information to favored plaintiffs attorneys. It wasn't always this way. Earlier my career, the DO was viewed as a welcome partner in a collaborative regulatory process.
▶ 0:28:44Now the sentiment that the do is on the same team as the ARISA plaintiffs bar with a regul regulated community on the other side seems to have messed within the DO. Common common interest agreements are but one symptom of this broader problem. The revolving door between the do and the Orisa planets bar is one driver of this unwelcome development.
▶ 0:29:08Frequently attorneys departing the do slide directly into private practice with the very plaintist firms to which the do back channelled information during their tenures. This incestuous relationship creates an alarming conflict. The balance the scales act represents a crucial step to restoring public faith in a regulator by bringing their activities out in the light of the public eye as they should have been from the very beginning. Thank you and I look forward to your questions.
▶ 0:29:38Thank you. Next, I'll recognize Mr. Banduchi for your testimony.
▶ 0:29:43Thank you, Mr. Chairman, Ranking Member Design, and members of the subcommittee. Thank you for the opportunity to testify today. My name is Andy Banduchi. I'm the senior vice president for retirement and compensation policy at the Orisa Industry Committee or ERIC. We're a national organization uh an advocacy organization representing the largest employee benefit plan sponsors in the United States. More than 150 million Americans have employer provided health coverage. Nearly a 100 million private sector workers have access to workplace retirement plans like 401ks.
▶ 0:30:14Um to start, it's a real honor to be a witness today. I had the privilege of staffing this committee on benefits issues uh for several years ending in 2017. During that time, I saw serious legislators advance creative bipartisan solutions that have helped the benefits community. The committee deserves credit for its leadership and similarly today's hearing is very important. Benefits are protected by federal law, including the Employee Retirement Income Security Act of 1974 and other laws and regulations overseen by the Employee Benefit Security Administration at the DO.
▶ 0:30:45At its best, EPSA is an agency that protects workers and retirees from bad actors, assists employers with legal compliance, helps correct problems with benefits plan design and administration, and reduces red tape. Sadly, despite the key role that ARIS that EPSA plays, ERIC members have reported for years that enforcement has been unbalanced. First, EPSA's investigations are taking too long. Among our membership, we've heard numerous stories of plan audits taking five, six, seven, even eight years.
▶ 0:31:15Second, internal DO handoffs either between offices or personnel slow things down, resulting in years and thousands of dollars wasted. Third, ERIC members also complain about a double standard in these investigations. Do all expects the timely production of requested documents and interviews with plan officials, but do all officials too often go radio silent for months or even in some cases years on end. Fourth, too often the investigations appear to be fishing expeditions without a detailed focus.
▶ 0:31:43And fifth, there's just not enough transparency about DO's coordination and in some cases even collusion with class action plist attorneys. EPS does very important work. We are hopeful DO leadership will address these long-standing issues. The recently announced emphasis on compliance assistance is a positive first step. In the interim, policymakers should consider reforms to ensure that EPSA officials act with transparency and accountability.
▶ 0:32:05For example, Eric supports the EPSA investigations transparency act, which would impose modest annual reporting requirements such as disclosure about the nature and number of of active investigations. We see this as just good government 101. EPSA also supports the balance the scales act which would bring transparency to EPSA's coordination with the plaintist bar.
▶ 0:32:24If EPSA is determined to provide information to attorneys suing benefit plans then surely it's reasonable that the scope of this cooperation should should be documented and transparent to the employers and to members of the committee. Large plan sponsors provide health and retirement benefits to tens of millions of their employees uh and their families. and on their behalf. We look forward to working with members of this committee on both sides to improve the benefits landscape. Again, thank you very much for the opportunity to testify and I look forward to your questions. Thank you. Next, I'll recognize Mr.
▶ 0:32:54Kawir for your
▶ 0:32:58Thank you, Mr. Chairman. Um, uh, Ranking Member Donier and Ranking Member Scott, thank you for the invitation along with members of the subcommittee. I really appreciate being here. Um, I want to start with maybe a moment of personal privilege. It is a pleasure to be here with Mr. Banduchi. I always knew that one day we would end up on the same side. I didn't anticipate it would be here, but um I'm looking forward to today's conversation with you.
▶ 0:33:21Um I left EBSA in January after spending almost 20 years at the agency and in my time there I served in a variety of roles and the enforcement um policy and leadership capacities. Um I am appearing in my personal capacity today. EPSA is an agency with vast responsibilities. It is responsible for millions of private sector employment based retirement, health, and welfare benefits plans. Those plans cover over 153 million people and collectively hold about 14 trillion in assets.
▶ 0:33:48In addition, EPSA has responsibilities over the IRA market, which holds about $17 trillion in assets, and for the federal thrift savings plan, which is approaching a trillion dollars in and of itself. My testimony today, I want to highlight several significant challenges that EPSA faces. First, we have a base budget that has not kept pace with increases in costs. Things like salary, travel, building maintenance, security. Those costs have all gone up as EPSA's budget at a base level has remained relatively static.
▶ 0:34:19Second, we have Dogeriven activity that has led to the loss of about a third of EPSA's investigative staff. Third, a Trump budget request in the FY26 um capa in FY26 that not only drops the Biden administration's request to replenish the bipartisan No Surprises Act fund, but also cuts the base budget by $10 million.
▶ 0:34:42And fourth is the simple reality that you have an agency that is very small relative to its This disparity is even more stark when you compare it to peer agencies. the SEC the ratio of investigators or auditors to the ent regulated entities is about it varies but you could say one to about a dozen for EPSA the number right now is 1 to 17,000 you're going to hear a lot today about purported widespread problems with EPSA's
▶ 0:35:12enforcement program but the statistics tell a very different story just last fiscal year the agency recovered $1.4 4 billion. That's direct payments to participants and beneficiaries. Almost $742 million of that was from the civil enforcement That program also got over 320 non-monetary corrections. These are really important um corrections, things like removing bad fiduciaries or improving plan practices.
▶ 0:35:43In addition, in the criminal program, there were 161 guilty pleas or convictions. The bottom line is simple. EPSA's enforcement matters. There are two specific topics of today's hearing that I want to share some thoughts on. First is the timeliness of EPSA's investigations. As of November 11th, uh November 7th, 2023, only about 3% of EPS's investigations were still being actively investigated 48 months later.
▶ 0:36:09twothirds of those had taken so long because in the intervening period Congress had passed a law um in the no surprises act there was another provision related to mental health parody that required a written comparative analysis for mia benefits and so EPSA began to request and analyze those written comparative analyses but the primary driver of delay is underfunding second are the claims of widespread collusion between EPSA and the plaintiff's bar Congress in passing Orisa gave the department explicit
▶ 0:36:39authority to share information with a variety of interested parties. Again, the statistics tell a different story. Over a 15-year span, there were only 12 investigations that had a common interest agreement out of over, as the ranking member mentioned, 31,000 investigations. That's a ratio of 0.04%.
▶ 0:37:00Make no mistake, today's hearing is really a conversation about whether participants and beneficiaries across the country, workers, retirees, and their family members should have any recourse at all when they're wronged. In FY22, EPS investigators recovered per investigator per day. I should repeat that. That's almost $17,000 per investigator per day. I urge this committee to focus on the real issue at hand.
▶ 0:37:29Don't invest in red tape. Invest in EPSA. Thank you again for the opportunity to testify today and I'm happy to answer any of your questions.
▶ 0:37:38Thank you. And lastly, I'll recognize Mr. Bonham for your testimony.
▶ 0:37:43Thank you to Chairman Allen, uh, Raiki Member Dier, and subcommittee members for this hearing and the opportunity to testify on behalf of our membership. Um, I am Jim Bonham, the president and CEO of the ESOP Association. Uh, our association is the largest employeeowner organization in the world. We enjoy an active membership of more than 3,400 ESOP companies and professional service providers such as lawyers, accountants, and plan fiduciaries.
▶ 0:38:09I have a reputation for being very direct, and I'm going to serve you the courtesy of being so today. The enforcement and investigative actions by the Employee Benefit Security Administration are broken. They're misaligned and they're abusive and have been for decades. Sadly, the chilling effect of this long-standing posture on plan formation has denied potentially millions of workers the chance for a better retirement and a better workplace.
▶ 0:38:37When people ask me why there are not more ESOPs, the answer is this, the subject of this hearing. This is why EBSA needs substantial reforms. Our members have been investigated arbitrarily and relentlessly by EPSA for decades. Indeed, it is difficult to find an ESOP that has not been investigated by EPSA in some form.
▶ 0:39:01The environment EPSA has created is so bad that when a new ESOP is formed, the professionals feel it is their obligation to warn the ESOP founder to expect and budget for the near inevitability that EPSA and the DO will investigate them. It is the expectation they will be investigated, not the exception. I want to share with you four specific areas of serious concern and in our view abuse of EPSA's authorities.
▶ 0:39:30one neverending stop and start multi-year investigations that often result in companies, directors, and fiduciaries agreeing to tolling under the threat of lawsuit or even criminal penalty, which effectively waves ORISA's six-year statute of limitations. These multi-year investigations regularly involve multiple changes to EPSA personnel, who often just start over.
▶ 0:39:55The result often is the plan and its insurer simply throwing in the towel and agreeing to some form of settlement, typically the insured amount under their policy just to finally bring an end to the process. Two secret so-called common interest agreements where EPSA investigators use taxpayer resources and extrajudicial governmental investigatory powers to subsidize private law firms class action lawsuits.
▶ 0:40:19We have long suspected these secret agreements existed and that suspicion has recently been confirmed through discovery in ESOP case and litigation. While we do not yet know the full extent of these secret arrangements, both formal and informal arrangements, it is clear that EPSA is using its investigatory authority to support private law firms and their litigants, thereby violating plan sponsored due process and fairness.
▶ 0:40:46three taxpayer-funded government expert witnesses who have poor knowledge and little background in ESOP plan formation. These so-called experts have been paid millions of dollars in fees, yet often fail to meet the very standards to which EPSA desires to hold plan fiduciaries.
▶ 0:41:04An excellent example lies in the failed and blatantly incorrect evaluation put forward as expert testimony in the Bowowers and Cubona consulting case where EPA lost every single point in its complaint against the plan sponsor and the solicitors were even fined and sanctioned by the judge during the proceedings for their behavior and four indiscriminate fishing expedition style investigations designed to drag net the ESOP community and impose EPO's views notably views that have never
▶ 0:41:34been published as regulations or subjected to notice and comment public input as required by law. Following heated criticism from the Congress for the volume of direct plan investigations, EPSA changed tactics to create the appearance of reduced plan investigations. Rather than looking at specific ESOP transactions, EPSA instead began issuing draget style letters to professional fiduciary firms that represent multiple ESOP plans.
▶ 0:41:59These investigatory letters indiscriminately seek information on all plans under the fiduciary's purview, thereby capturing information on multiple plans simultaneously, all the while telling Congress that the number of plan specific investigations are dropping. I once again thank you for the opportunity for testifying and would be pleased to elaborate on any or all of these main
▶ 0:42:22Thank you, sir, and thank you to all our witnesses for your opening statements. Under committee rule nine, we will now question witnesses under the fivem minute rule. I will recognize myself for five minutes. Mr. Gumbic, the Biden Harash administration's uh assistant secretary for EPSA stated that information sharing in the form of common interest agreements as a normal tool in litigation.
▶ 0:42:47In December of 2024, a DO spokesperson said that EPSA had entered into nine common interest agreements since 2022. What is a common interest agreement and how does a common interest agreement differ from EPSA's assistance to plaintist attorneys that you have
▶ 0:43:07Thank you, Chairman Allen. A a common interest agreement as used in legal proceedings involves two parties who share a common interest in the outcome of a litigation or a proceeding or dispute or controversy. So in the in the case I was involved in, there was a common interest agreement that had been entered into between the Department of Labor and a plaintist firm.
▶ 0:43:30Uh but as we found out in the in the lawsuit, the department had not yet reached a decision about whether there was merits to the underlying investigation, whether it actually wanted to bring uh an action against uh the uh the the target in question.
▶ 0:43:49So there was ne there was not a common interest in the outcome of the of the dispute but the deal the do nevertheless had entered into that common interest agreement at that time and the court found on that basis there was no common interest between the department and the plaintiff's law firm.
▶ 0:44:07I understand that you were the attorney who first discovered uh that the Department of Labor was secretly sharing investig investigation information with a plaintiff's law firm known for class action lawsuits against employee benefit plan sponsors. Can you share how you learned this?
▶ 0:44:26Yeah. Yes. Uh at one point in the um the we had produced in discovery a copy of a a findings letter from the department of labor indicating their preliminary findings with respect to an investigation of the transaction that was subject to that litigation. Um the department in that same findings letter issued preliminary findings with respect to other unrelated investigations. So we produced a copy to the plaintist firm.
▶ 0:44:55We we produced a redacted copy redacting the the names of these other investigations. The plaintist firm pushed back for months said that they they needed an unredacted copy. On the eve of key depositions the plaintist firm produced to us an unredacted copy of that findings letter. At that point I went to the do government lawyer in charge of the underlying investigation.
▶ 0:45:21He confirmed he had he had provided an underacted copy of that letter to the plaintiff's firm pursuant to a common interest agreement. Surprise, surprise. Uh were you surprised to learn of the secret sharing arrangement? And if so, when did it come as a surprise?
▶ 0:45:39Well, we always had a suspicion um Chairman Allen that uh that this this practice uh was occurring because it was too coincidental. There'd be an opening investigation. There'll be documents exchanged, witness interviews, and then a year or two later, a plaintist firm is bringing a lawsuit with respect to the underlying investigation. But this was a an instance where we had concrete proof that this type of sharing arrangement was occurring between the government and a class action law firm.
▶ 0:46:09And when you found out about this, you brought it to the court's attention. As a result, the magistrate judge stated the plaintist arrangement with the do has given plaintiffs access to information they can leverage used to take shortcuts and rely upon to circumvent discovery protocols. Could you tell us more about how the court viewed the arrangement?
▶ 0:46:30Yeah, I think the court was very disturbed that you had um litigation in the shadows with the government supplying information to the plaintist bar and it really can create a a uneven playing field. You have a plaintiff firm who's getting information they otherwise could not get at the outset of a lawsuit and it maximizes their ability to get beyond what we would call a motion to dismiss an early stage dismissal of a case.
▶ 0:46:56As the Supreme Court's recognized, the decks then are stacked against defendants regardless of the underlying merits given the the crushing burden and cost of discovery. And so it it creates an uneven playing field and the magistrate was concerned about that.
▶ 0:47:15How could a plaintist law firm circumvent discovery rules by using a secret sharing arrangement with DO without consequences? I mean it obviously lawyers have peer reviews and that sort of things. I mean this sound sounds like it's really outside the uh the standard of practice to uh could you comment on that?
▶ 0:47:36Yeah. Well, it it gets to the very heart heart of the the bill that's uh that we're talking about today. Transparency. in the lawsuit I was involved in, we did not know that there was a common interest agreement between the government and the plans firm. We did not know that the government was sharing key information with the plaintist firm.
▶ 0:47:56So in the absence of that, we had no way of utilizing our own discovery tools to subpoena the government for emails information the information that they shared all the things that we did when we found that out in the lawsuit that I was involved in.
▶ 0:48:12All right. Thank you. All right. Uh call on Mr. Tantto from California for his two gentlemen from California. I wasn't sure which one. Okay.
▶ 0:48:26Thank you. Thank you, Mr. Chairman. Um I want to thank the witnesses uh for being here today and to thank you for scheduling you, Mr. Chairman, for such an important hearing. Um Mr. Coller, would you like to respond to any of the earlier statements that were made?
▶ 0:48:45Um not so far. I mean, there's a there's a lot to unpack and there's a lot of, I think, problematic statements that were made, but um I'll I'll probably reserve the right to do.
▶ 0:48:54Okay. Thank you. Uh in your testimony, you spoke about an individual who was denied a life-saving heart transplant by his employer sponsored plan. EPSA intervened and successfully appealed the denial, something even this patient's doctors could not do. The doctors tried to get the plan to do this. If an insurance company refuses to cover an essential treatment for one of the millions of people who have employer sponsored who have an employer sponsored health plan uh which happens far too often.
▶ 0:49:24How does EPSA assist with like an appeal like this?
▶ 0:49:28Um thank you for that question. I would love to tell you that um this was the only time in my career at EPSA that we had a story like that. Unfortunately that's not the truth. Um it is too frequent that in the context of employment based health arrangements people's benefits are denied. Um and one of the things that they can do is contact the EPSA benefit advisors. We have a toll-free number. It's 866444 3272.
▶ 0:49:51And when they contact that number um what used to happen I should caveat all of this with this is only up until January 20th because with staffing cuts I really can't give you any assurance about what kind of service people receive now.
▶ 0:50:05But what used to happen is that calls were answered live um if they were made during business hours and you would get someone that is very highly trained who would answer your questions if you had basic questions and then act as an advocate and and trying to informally resolve that issue between you and your plan, the service provider, the doctor, the the insurance company and try to get them if it was appropriate to get that benefit approved. Um you made the example of a a heart transplant.
▶ 0:50:34There's another example I'm thinking of right now of a young mother who had cancer and was being denied a liver transplant um and uh her insurance company essentially gave her a death sentence and not but for EPSA's engagement. I'm confident that she would have died.
▶ 0:50:50So EPSA is like this government agency that can help ordinary citizens who know about EPSA to call that number and to get help when they have a dispute with their health plan. uh when that health plan may be refusing to pay on a claim that even their doctors say uh that that health insurance company should should be looking at it. Is that right?
▶ 0:51:11That's correct. Unfortunately, not enough people know about this. I think of the VA program as a hidden jewel,
▶ 0:51:17I I didn't know about this. I would love to have known about it so I could tell my constituents this is where you can go when you have a problem uh with uh a claim with your insurance company. they're refusing to pay or they're refusing to cover a lifesaving a a vital urgent life-saving procedure. This is where you can go.
▶ 0:51:36And you're saying that that EPSA has had reduced staffing and that you're not really sure that people can connect with a with a live uh with a live technically trained person to guide
▶ 0:51:50Yeah. Yes, Representative. It's um it is truly unfortunate because you have situations like the one that you're describing and it used to be a point of pride in the agency that calls were answered live and then it was something like 95% of calls were returned within one business day if someone called after
▶ 0:52:06Okay. We just heard Mr. Columbic described this situation where EPSA, you know, has colluded with these uh with with plaintiffs attorneys and how unfair it is to these defendants and the defendants in this case are mostly these huge health plans or huge pension plans. Um go ahead.
▶ 0:52:27Well, um in the health context, it's very frequently I I believe the bad actor is a health insurance company even more than the health plan itself. So the health So the health insurance company that's that's that's refusing and stopping the claims.
▶ 0:52:41Do we do we think of the little American citizen who's trying to get a heart transplant or a liver or any a liver transplant approved against the big insurance company? Are are they the ones that um are are such the an unfair uh sort of claimment against this big insurance company? I mean, do do we think do do we think that I mean, I think of this EPSA as kind of a a very important uh advocate for the ordinary
▶ 0:53:11I I agree, Representative. And I I think when you're talking about the people that are impacted, it is often in the health context individuals with pretty significant health needs. I also believe that when we are talking about um these common interest agreements and what this bill would do, it it is a bit more than transparency because for example, there's a requirement in the bill that before sharing any information with an attorney that that attorney might use in essentially bringing a lawsuit under Orisa,
▶ 0:53:42you have to enter into this agreement, you have to share it with the relevant fiduciaries and all of that kind of stuff. The problem is if you think about these benefit advisors, they're getting a phone call. They're getting a question now. We're telling them that no, you need to make sure that these things are done. Here's some additional paperwork you need to do. You can't help this individual.
▶ 0:53:58Thank you, Mr. Car. I'm sorry for going over, but it just seems like this bill is going to weaken the protections for the consumer, weaken the advocacy that that would be so costly. Thank you. I I yield back.
▶ 0:54:08Uh the gentleman from California yields. Now I recognize the gentleman from Ohio, Mr. Rulie, for five minutes of
▶ 0:54:16Thank you, chairman. Employer sponsor retirement plans are the backbone of American retirements. Over 70 million workers are covered by these very plans. Private employers voluntarily sponsor more than 800,000. Ursa covered plans holding more than $9 trillion in assets. We're not talking millions. We're not talking millions. We're actually talking trillions. N trillion dollars in assets.
▶ 0:54:42When I learned that the Biden Harris Department of Labor shared confidential employee benefit information with plaintiffs law firms, I had to get involved immediately. It was shocking to understand that this was being shared. The DO should never be sharing secret or sensitive information with anyone unless the lawyers consent to do this. So the question would go to Mr. Bonum. Can you speak on how the DO's actions are hurting American workers and employers right now?
▶ 0:55:13Where to start?
▶ 0:55:15Where to start? Um the investigatory actions by EBSA. Um there I would put into two categories of how it's hurting American workers. First are the millions of Americans who are never even given the opportunity to benefit from a plan because of the chilling effect that EPSA has on plan formation.
▶ 0:55:37Um we did a survey about a year ago of businesses who were looking at their succession plans and uh whether or not they would be interested in forming an ESOP. um close to 80% of all business owners who were looking at retirement were highly interested in forming an ESOP. Once we introduced the idea of EPSA and their enforcement powers, it plummeted.
▶ 0:56:02They just don't want to deal with the risk that the introduction of uh EPSA's enforcement uh uh capabilities uh introduce. Second, it introduces for plan sponsors um significant cost. And that cost can range from as little as 80 to $100,000 for a basic response to an investigatory letter to literally millions of dollars.
▶ 0:56:31I was speaking to a uh a CEO just yesterday who was the subject of one of these investigations. uh three years of discovery, $3 million worth of legal fees. There were no findings at all. Immediately after they received the conclusory letter from uh the Department of Labor, they were then slapped with a class action lawsuit that cost them another $2 million. Was it a coincidence? We don't know.
▶ 0:57:00We hope that some of the investigations we'll find out. But those are just a couple of examples of where the investigatory abuses at EPSA have had a dramatically chilling effect on plan formation. And we should all remember that offering retirement plans and offering benefits are voluntary on the part of the employers. And unfortunately employers are now going to the least common denominator so they can offer just the basic plan but nothing more because it becomes too complicated.
▶ 0:57:30Really appreciate that answer. We introduced HR 2958, the Balance and Scales Act, requiring the DO to enter into written agreements detailing what type of assistance will be given before sharing confidential information with attorneys and to share those agreements with the employer or the plan sponsor that could be negatively affected by this. Could you perhaps speak on why this legislation is actually needed in the industry?
▶ 0:57:56Thank you for that question as well. First, it's a basic matter of due process and the rights of the accused. You know, as the magistrate judge in Colorado said in the case that Lars was working on, um, as she said in her decision in the case exposing the practice, these secret common interest agreements would quote, allow a government agency to weaponize private litigation against some target before confirming the target should even be a Transparency helps build
▶ 0:58:27trust. Second, EPSA has a history of ignoring both Congress and the industry. The ESOP community knows this well from our decadesl long struggle for proper regulation. Therefore, legislation is needed to force these needed long- lasting reforms.
▶ 0:58:44Thank you very much for your work and your support. Really appreciate it. And we need to stop the madness and get back to protecting our American employers and more importantly the American workers. And with that, Mr. I yield back.
▶ 0:58:56The gentleman from Ohio yields. Uh, now I recognize for questioning for five minutes the gentle lady from Georgia, Miss McBath.
▶ 0:59:06Thank you, Chairman Allen and Ranking Member Don. The Employee Benefit Security Administration has the important responsibility of protecting the health benefits of over 150 million hardworking Americans on employer sponsored health insurance. And unfortunately, a growing number of Americans who have put in their time at work and paid into their health care plans are not receiving the health benefits that they are entitled entitled to under the federal law.
▶ 0:59:35With the increasing complexity of the health care system, the Employee Benefits Security Administration's responsibilities have grown significantly over the years. Yet, the agency remains chronically underfunded and understaffed. And the lack of resources at this agency means that employees continue to wait on their health health care benefits. Uh, and investigations are delayed when trying to stop bad actors who take advantage of the patients.
▶ 1:00:04Last session, Chairman McAllen and I, we sent a letter to the Employee Benefits Security Administration about our concern over alternative funding programs in health insurance under the guise of saving money. Alternative funding programs are pushing health plans to exclude certain They abandon patients, leaving them to seek out assistance programs that are already overloaded.
▶ 1:00:33Ultimately, and far too often, these patients unexpectedly have to shoulder the full cost of oftentimes their lifesaving medications or experience delays that can result in harmful complications. And no one should ever have to wait for a lifesaving treatment. Trust me, I know. I'm a two-time breast cancer survivor. And the reality is is not everyone can actually wait for a lifesaving treatment.
▶ 1:01:01The cases that have been submitted to the Employee Benefit Security Administration, they tell the stories of people who are just basically at their wits end needing help to fight an insurance denial for their life-saving treatment or begging for oversight to investigate alternative funding programs that have cut off access to the care the patient thought that they had.
▶ 1:01:26And while the agency is tasked with this important role that has financial and profoundly personal impacts for all those in our health care system, years of underfunding and budget cuts have threatened to undermine its original intent and mission. Just this year, we have seen career federal employees pushed out of their jobs and an additional $10 million in cuts that are still being proposed.
▶ 1:01:54On behalf of the millions of Americans in this country who rely on health insurance through their jobs, it is our duty to support oversight and to cut through the red tape and to protect those patients Kawwar, um, if you will, what impact would strong investments in the Employee Benefits Security Administration have on its ability to better protect
▶ 1:02:24health coverage for the American people?
▶ 1:02:28Thank you for that question. Um, and I agree with everything that you've said. I mean, investing in this agency means investing in the Americans that are struggling with insurance company red tape today. Um, it is investing in Americans who have done the right thing and saved through their job in their retirement and want to make sure that that retirement is there when they ultimately reach the right age.
▶ 1:02:52Unfortunately, with the budget cuts, um, it is hard to see how the agency is going to be able to continually um, continue to successfully achieve its mission. Things like the benefit advisor program are going to be really heavily impacted. investigations are going to be very heavily impacted. They are going to take longer. Um the agency is going to be able to do fewer of them. Um and there are going to be people that are really in need of help who deserve the government's help that aren't going to be able to get it.
▶ 1:03:22And it is 100% going to be because of resource constraints.
▶ 1:03:26So why has the workforce at EF at EBSA declined so dramatically if you can tell us? And what can just really be done about it? Yeah, I mean there is a long-term uh problem of chronic underfunding. Um costs increase and when budgets don't then that means you have to find somewhere. Um I think that it's something like 70 75% um is about the percentage of EPS's budget that is kind of taken up by just pure personnel costs.
▶ 1:03:56And so as um very normal things and appropriate things like increasing salaries to account for inflation um that money needs to come from somewhere and when you don't have many other places to look the place you end up having to look is by reducing your headcount. Um so there is a longer term issue here. Uh the approximate cause however is you know since January there has been a pretty concerted effort to push federal employees out of their jobs.
▶ 1:04:25uh EPSA has not been immune to that and so there has been a um as far as I can recall pretty unprecedented attrition rate um in the last few
▶ 1:04:34Well, thank you so very much and I'm out of time. Thank you each and every one of you for being with us today as our witnesses and I yield.
▶ 1:04:41I thank the general lady for yielding and now I call on Mr. uh McKenzie from Pennsylvania for five minutes of
▶ 1:04:51Thank you, Mr. Chairman, and want to thank all of our testifiers here today. Okay. It's an important conversation that we're having about EPSA and the ability of a government agency to help uh in the marketplace where individuals are getting their health insurance all across the country. Making sure uh that the benefits they are owed are uh being paid to them when when necessary.
▶ 1:05:11Uh but at the same time also making sure that there is transparency and oversight going on at this agency to make sure uh that they are conducting themselves in a proper fashion. So pretty concerning some of the testimony that we're hearing today. Uh and my first question is going to be for Mr. Golic. Uh regarding EPSA and the the secrecy of the information that was being shared with plaintiff's attorneys. Uh obvious obviously confidentiality was breached there.
▶ 1:05:41uh and what does this do to uh the willingness of different stakeholders to actually cooperate and engage with the DO uh if they have this concern uh as a defendant or a potential defendant uh why would they even come forward and and cooperate or engage with DO uh ultimately in in the furtherance of benefits for the individuals? Uh but why would they why would they participate in something like that if they're afraid their confidentiality might be breached?
▶ 1:06:11Yeah, thank you. That's a great question, Representative McKenzie. And and just to put a finer point on it, in the the matter that I was involved in that I testified to today, my client in response to requests for information from the the government designated documents as exempt under FOYA, meaning they deserve confidentiality designations. And to the extent the government was going to uh furnish it to any outside third party, they needed to give notice to my client.
▶ 1:06:40So we had an opportunity to object to it given the confident the confidential nature of the information that didn't happen. So, I think what we're finding as a consequence in in light of this disclosure that there these common interest agreements exist, I'm finding that with my clients who are involved in active Department of Labor investigations, they're quite reluctant to turn over information because there's no they're worried about the government maintaining the confidentiality of it even if we designated as exempt under FOYA.
▶ 1:07:09and and the Department of Labor historically has been reluctant to enter into um normal routine confidentiality agreements ensuring the safeguard the safeguarding of information. Um so it it's a quandry and and we have active clients who feel like they're between a rock and a hard place trying to respond you know responsibly uh on behind government subpoenas and requests for information.
▶ 1:07:34Yeah, I think it could have a chilling effect on the uh willingness of participants to participate and engage with DO and again ultimately that that would be a problem uh for the whole system. Uh I I would also ask this uh are you aware or do you know if this practice is still occurring at DO with maybe career employees there?
▶ 1:07:57I don't know the current state uh of of the practice at the government. Um I I would though uh add a note in response to other testimony today. What we are aware of are several instances of those type of agreements by the government and class action firms being reduced to writing.
▶ 1:08:17But there there I'm sure there and the the office of inspector general may get to the bottom of this countless examples of the government picking up the phone and contacting plaintiffs counsel talking about legal strategy talking about underlying case supplying information that doesn't necessarily have to be reduced to writing in a formal common interest agreement.
▶ 1:08:40Uh, as somebody who's not an attorney, I'll ask your legal opinion on this and just an opinion, but could this affect the outcomes of previous decisions that were rendered? If somebody uh entered into an agreement where they were not made aware of a confidential uh side deal with DO and a plainif, uh, could that uh be revisited?
▶ 1:09:02I I don't know. That that's pretty speculative. I I do know just um in terms of matters we're involved in and matters I know that other uh lawyers in this industry are involved in um they are taking a closer look in active lit lawsuits to see if there is a connection between the government and the plaintist firm and seeking discovery to find out if any such agreements h have existed.
▶ 1:09:26Thank you. And just with the remaining time that I have uh Mr. Banduchi uh can you elaborate on your statement about uh providing suggestions for EPSA and what they should do with the limited resources they may have uh and how they could conduct themselves more
▶ 1:09:42Uh thanks very much for the question chairman. I see I've got eight seconds so I'll try to be quick. It really starts with the the foundational premise. Large employers uh in particular are mostly doing the right thing. They are providing benefits to tens of millions of of workers and their families and EPSA ought to begin with that premise and that understanding.
▶ 1:10:03Thank you. And I agree that should be the the premise and understanding and I think we can both do that and make sure confidentiality is protected as well. Thank you.
▶ 1:10:11The gentleman yields and now I call on Mr. Courtney from Connecticut for his five minutes of questioning.
▶ 1:10:16Thank Thank you uh Mr. chairman and um you know just an observation before I get into the question is just that um you know clearly there's a serious situation that's being described here and uh but I I appreciate the fact that um you know um attorney Goldman you know said that it's speculative right now to to to determine whether that's a systemic um phenomenon that's happening.
▶ 1:10:39We have an inspector general's report that's looking into this and personally I feel like this committee should should let that process take place before we start going in and changing statutes. I I just think that um you know that's that that in my opinion would be the normal process before we make a systemic change to find out whether there's a systemic problem. Um I on a more positive note I would just say that you know my experience with EPSA you know particularly in terms of uh ESOPS um has been pretty positive.
▶ 1:11:08We had um um Assistant Secretary Gomez in my district about a year or so ago. We visited an ESOP proponent which is a great aerospace parts manufacturer very active in the ESOP um association.
▶ 1:11:22And uh at that point again we were working on the work act which was uh legislation that I sponsored to again get the department of labor to finally sort of officially designate uh an office that would really help promote um you know the the ESOP option uh that's out there for a lot of uh really good companies that you know maybe again are hitting sort of generational sort of milestones and and want to you know maybe consider it but really don't have the consultant basis or you know
▶ 1:11:52the wherewithal to really understand it. Um and again it was adopted as part of the omnibus in 2023. Uh again very bipartisan effort and and something that um you know the certainly the private sector uh advocates worked with Congress um to get that through. I mean the the so the the authorities there for for that office. Unfortunately the funding hasn't been there to to really sort of kick it kick it in and and um get it into place.
▶ 1:12:19So again, just to follow up Miss Mcbass's question, Mr. Kamar, I mean, again, if we really are serious about trying to promote ESOP ownership and to expand it, which again, I think you've got people like Bernie Sanders and you know, conservative Republicans in agreement that that's really um you know, healthy for for um our private sector, but we need to again really get that office um stood up and and populated with people so that it can move forward. and maybe you can just respond to that.
▶ 1:12:50Uh yeah, thank you for your question. I mean I completely agree that um and and was very pleased when the department got the authority under the work act to do employee ownership promotion because I think um it is incredibly important to have programs that can highlight best practices in the private sector, can really promote things like worker voice and the benefits of employee ownership.
▶ 1:13:14Um we were able to uh and because we believed in the importance of this program, divert money from other parts of our budget to kind of do the basics of standing up the program. Um to be very honest with you, it is not going to come close to achieving its potential in the current budget situation.
▶ 1:13:33We were um you know the in the Biden administration the leadership made a point of uh conducting visits to employeeowned companies uh talking about the the program in speeches and really highlighting it. Um there are two really core functions of that office that I'm I'm pretty worried about. The first is that um well the the head of the office got fired in the Trump administration then later rehired but she is kind of the staffing um and it's not going to be sufficiently staffed.
▶ 1:14:03We're not going to really be able to do the level of outreach and education that we want to. The second part of um of the bill though that is still unfunded was money that we could the department could give to states to help them um do worker ownership programs within the states and and that has never been funded
▶ 1:14:23Thank you. And and again Mr. Bonham another part of that bill was to get the adequate consideration rule finished up and again that's obviously still an agency process. again maybe you can just talk about that quickly because I know that was an important priority for your
▶ 1:14:39Thank you Mr. Courtney and and uh again thank you for your questions. Um in I want to answer in two parts. First in relation to the office of employee ownership um and we're very very grateful for your work and others work to help create that office and strongly support his continuation.
▶ 1:14:55But it's noteworthy that one of the reasons that the ESAP community sought that office was so that there would be an internal alternative voice to the career employees at EPSA who always had a very very negative view of ESOPS. So we needed to have somebody inside the department of labor who thought that they were a good idea for retirement uh plans for employees.
▶ 1:15:17Secondly, in terms of the adequate consideration regulation, this is an area that we have been seeking for almost 50 years to have clarity on what rules a a fiduciary should follow in order to fulfill their good faith effort in valuing the company's shares and the agency has steadfastly refused to issue those regulations. It needs to be done and it needs to be done with reasonable input from the community.
▶ 1:15:45Uh the gentleman yields and now I'll call on Mr. Fine from Florida for his five minutes of questioning.
▶ 1:15:52Thank you, Mr. Chairman. So for 22 years I was an entrepreneur and started, built and grew companies. So I both created these plans and as well as was in them and so um it's an important issue and I think you've exposed a lot of real serious problems with how they're administered. Frankly, I didn't ever have any of these so I'm breathing a sigh of relief sitting over here. No one ever sued me, but but I my question is for Mr. Bonham.
▶ 1:16:15Um the Department of Labor investigated and then filed a lawsuit against an ESOP plan sponsor, its board of directors and its selling shareholders in the Bowers case. Um in 2021, the court found no violations of Orisa for a transaction that took place 9 years earlier in 2012. I know a little bit about it and it sounds like kind of a horror story and shows, you know, government gone wild. Um, can you describe what happened in this case and the cost of defending it?
▶ 1:16:45This is perhaps one of the best examples of the abuse that we've been talking about at EPSA that one can give. And I could go on for a much longer time than we have today.
▶ 1:16:56Well, you have 3 minutes and 56 seconds.
▶ 1:16:58You bet. So, in this case, um, literally during the deposition, the investigator was asked, "Why did you go after Bowers in Cubota?" and I quote, "My supervisor, he gave me an assignment to find some ESOP cases in Hawaii." End quote. And again later, quote, "My understanding is the department needed to have some exposure in Hawaii." End quote.
▶ 1:17:23Nine years later and millions of dollars in legal fees, there were no findings. In fact, the so-called expert that was hired to provide the the the expert valuation on behalf of the Department of Labor was completely discredited because he made an an arithmetic error and had his error been corrected and was known during discovery.
▶ 1:17:48Had it been corrected, his valuation would have even been higher than what the ESOP and actually paid for the value of the company. Since that time, the value of the company since it was sold to the employees through an ESOP has gone up more than 1,700%. These employees have benefited greatly. During the uh the the judge's ruling on this case, the judge said that this was not decided against D for a want of trying.
▶ 1:18:18It was it was decided because of a lack of evidence. The Department of Labor pursued this case relentlessly. The trustee died and rather than dropping the case against the trustee, they replaced the trustee with the widow. That's how relentless they were in pursuit of this case and they lost on every single case.
▶ 1:18:40Do you mind if I ask and if you've got more context you can share it but but does the government reimburse the company that has to spend the millions of dollars defending against what sounds like a spurious and kind of
▶ 1:18:52they have to sue the the company has to sue in order to recover some of those
▶ 1:18:57So they have to go deeper into the hole to come pay more lawyers to try to get paid for the lawyers they already had to pay for because the government came after them
▶ 1:19:04in in this case in particular Mr. Mr. Bowers who uh uh is was the wrong uh army ranger to to pick a fight with. He tried taking this all the way to the Supreme Court and it is almost impossible for a defendant to recover their uh their litigation expenses.
▶ 1:19:21So the government can make stuff up or actually just sort of target you for no apparent reason it sounds like because someone's boss needed somebody to have something to do. You can spend millions of dollars on lawyers. um you win, you get clear, your name gets cleared after nine years and then you're still you still lose. Like he he didn't win. I'm you know if you have millions of dollars of legal fees, you still lost because you lost money that you had and you had distractions from from operating your actual business.
▶ 1:19:49Any other thoughts on this case that you'd want to share?
▶ 1:19:52Uh there there are lots of other thoughts that I would I would like to share, but unfortunately we probably don't have have the time to do it. Um you know, it's interesting. I I I've spoken at length with Mr. Bowers about this case and when I asked him why he chose to fight and he is a very rare example of this because in almost every example it is a more prudent decision to just exercise your insurance policy, settle it out and move
▶ 1:20:22on with life. He says, you know, EPSA made it so easy because they were so unreasonable in their approach. You the treatment of Bowowers and Cuba in this case is no surprise to just about anyone in the ESOP community um who's been investigated. Um and it's it's it's the type of behavior that we saw from the EPSA attorneys and their approach.
▶ 1:20:45you know, go find a case in Hawaii and like I said, nine years later and millions of dollars in in defense and this is where they are.
▶ 1:20:54Thank you. Thanks for your context and thank you, Mr. Chairman.
▶ 1:20:57I thank the gentleman from Florida yielding. Now I call on Miss Lee from uh Pennsylvania for your five minutes of
▶ 1:21:06Thank you, Mr. Chair. Um today's hearing is framed as a conversation about restoring trust and uh enhancing transparency at the employee benefit security administration. But what really uh in question here is whose trust is being restored at whose expense? Unfortunately, the majority seems to think that restoring trust means making life easier for employers under investigation. To them, balancing the scales means tipping them further towards corpor uh corporations and away from the workers.
▶ 1:21:36Um, EPSA uh their core mission is to protect workers retirement and health benefits, not to cater to employers. Imagine working your entire career. You make it to retirement, but you find that all your savings are gone because your employer or your benefits manager lied uh misused your funds or just outright stole uh from your plan. EPSA exists to put rules in place to help prevent this from happening.
▶ 1:22:04And when those rules are broken, EPSA has the authority and the responsibility to hold these employers or plan managers accountable. Over the years, EPSA's workforce has steadily declined and its responsibilities have increased all while its funding has remained flat. Even so, EPSA is still taking meaningful enforcement actions to protect workers benefits. Um, Mr.
▶ 1:22:23co um could you just discuss very briefly because I also uh want to make sure that we we can hit a couple things but can you discuss some of the complexities in in investigating and concluding a case particularly what factors might slow things down?
▶ 1:22:38Um yeah thank you for your question. And I will try to be brief but it is uh there is a lot. Um so um the size and complexity of the entity being investigated, the volume of evidence that they produce, um what that evidence shows including you know there is not a practice that if you ask a question about X and then you get evidence of wrongdoing somewhere else that we ignore it. Um so it may lead to additional document requests or questions how cooperative the um entity is.
▶ 1:23:06Uh it's not infrequent that EPSA starts with voluntary production of uh documents and then doesn't get the documents that it asks for needs to move to a subpoena. Um needs to enforce that subpoena in court. All of that is leading to delays between when the investigation opens and when EPS is kind of done with just the very first stage which is they have a conclusion of what they think has happened. They present that to the fiduciaries and say this is these are our findings. Can we talk about how we proceed?
▶ 1:23:34And if I could uh add just what impact will the agency's proposed budget cuts have on the department's ability to close those cases quickly then?
▶ 1:23:41I mean I think given the severity of the cuts that we've seen just in this year um there's going to be a pretty unfortunate choice between do you allow these cases to drag on for longer because you need to reshuffle personnel or do you just close them even though you're convinced that there's something there and people have been harmed.
▶ 1:23:59So instead of cutting funding, we should be strengthening this agency because what's being presented as a push for transparency is in reality just a set of proposals that risk bogging down the enforcement with additional red tape, slowing investigations, shielding employers, and draining resources that should be used to protect those workers. Mr. Car, in your testimony, you stated for every dollar that Congress uh invests in EPSA, the agency has consistently returned many multiples of that amount in direct payments to plans uh participants and beneficiaries. is
▶ 1:24:29yeah I mean one figure is 17,000 approximately dollars per investigator per day. Um another figure for one specific category of cases um that shifted to in in light of budget cuts trying to find more impactful cases that were going to impact more people. The number for that is about $150,000 per investigator per day.
▶ 1:24:51Thank you. So in other words, cutting EPS funding actually cost taxpayers and workers more money. So, why are we uplifting bills that would further drain EPSA's resources through burdensome reporting requirements while doing nothing to help workers recover uh their stolen benefits? I can speak to EPSA's importance firsthand. In my district, a Pittsburgh area administrator uh overseeing 240 or so retirement plans embezzled at least 5.5 million from workers accounts. ABSA stepped in and took swift action.
▶ 1:25:20Uh, freezing the assets and securing court orders led to a $50 million settlement and likely saved my constituents millions more. Yet, instead of supporting EPS's critical work um, such as this, the majority wants to undermine it. Today's bills don't restore trust or trans or improve transparency. They shift EPS's focus away from defending workers benefits uh, and towards easing the burdens on employers. They frame investigations as too long without regard for the complexity or for the stakes.
▶ 1:25:50And they call for transparency measures that actually make it harder for EPSA to do its job, shielding employers from scrutiny while creating new hurdles for enforcement. If this committee is serious about uh restoring improving uh fun the function of EPSA, the solution is clear. Increasing the agency's funding. That's how you build trust not just with employers but with the workers whose futures are on the line. Um I thank you also so much for your time and I yield back. The gentle lady yields.
▶ 1:26:15I now call on our great chairman Wahlberg from Michigan for his five minutes of questioning.
▶ 1:26:22Thank you, Mr. Chairman. Thanks for this hearing and thanks committee. Andy, it's great to see you back.
▶ 1:26:27As always know that people can be elevated and uh they're they're stolen from our committee. Some of the best people. So, good to have you back, Mr. Gullenic. Uh and Mr. Banduchi, Mr. bonum employers voluntarily sponsor retirement plans and in doing so the employer commits to comply with the laws governing those plans.
▶ 1:26:50EPSA investigations also rely on uh the voluntary cooperation uh of the employer, although voluntary cooperation is not necessary. Now that the public has learned, and this is my question, since the public has learned that EPSA has secretly shared information with plaintiffs attorneys, stacking the deck, how will employers willingness to cooperate with EPSA's investigations change? Mr. Golic.
▶ 1:27:19Uh, thank you for that question. I I think it's had a chilling effect in in the cases that I'm involved in where we're representing plan sponsors and fiduciaries and active Department of Labor investigations. There's a natural reluctance to produce information uh and to cooperate um in the in the absence of any assurance uh that information that has been produced that is that is designated as exempt under FOYA will be treated that way. That did not happen in the lawsuit I was involved in. Mr. Van
▶ 1:27:50I think from a from an employer standpoint, right, when when we're on the other end of these audits or investigations, there's a desire to get to a resolution. And it's really hard to get to a resolution if you don't know exactly who's on the other side, right? And so, if it's a labor department, that's one thing, but if it's a labor department and then um other attorneys and other law firms, I think that's even more challenging.
▶ 1:28:13Okay, Mr. Bonham? I hate to say this, but voluntary cooperation is imaginary. If you receive a letter from EPSA, you hire a lawyer and you respond. So EPSA's breach of trust in these agreements is actually increasing cost not just for plan uh sponsors, but it's actually increasing cost for EPSA because everybody lawyers up immediately. If there's no trust, there is no voluntary cooperation.
▶ 1:28:41Okay. Thank you. Uh Mr. Golic uh Banduchi and Bonham, a 2019 practical law publication titled Guide to Dealing with Department of Labor investigations of retirement plans gives tips to reduce administrative burden, cost, and stress associated with EPSA investigations.
▶ 1:29:04In your experience, what is a ballpark range of the amount an employer spends when responding to and potentially defending against an EPSA investigation? Uh, Mr. Bonum, we'll start with you.
▶ 1:29:18I would say the minimum expense is going to be in six figures. The high end of expense is going to be in multiple millions of dollars.
▶ 1:29:26Well, Mr. Banduchi, give us give us better news.
▶ 1:29:29I I don't have better news, unfortunately. Obviously, it depends on the the complexity of the investigation, how long it goes on, but if you're dealing with um a very complex plan with very uh broad uh sort of fishing expedition type requests um and and scope, it's going to be very very very
▶ 1:29:48Mr. Gumbic,
▶ 1:29:50yeah, I think the potential expenses and costs uh can be astronomical. you're you're going to be producing documents to the government, collecting those documents that could be in the millions. Um, often you need to get an an electronic or eiscocovery vendor to assist you. Um, there's then going to be often interviews of of key witnesses, as Mr. Bonham alluded to. That often you're almost invariably going to be hiring uh outside legal counsel to assist you in preparing for those interviews.
▶ 1:30:20And then um the department may issue a preliminary findings letter that would result in um putting together a response back um negotiations over a potential resolution. So the costs are are going to be they they can be potentially It's it's it's apparent in looking at at least from my perspective that something that's supposed to be a partnership to make sure that good is is is rewarded and bad is
▶ 1:30:50disciplined uh through the process the government has in oversight has become one-sided in many ways and ultimately cost and distrust and automatic assumption of guilt uh one-sided doesn't work and I think that's uh as address the concerns of my colleagues on the other side.
▶ 1:31:10That's our concern that the system works and choice is given and opportunity is given and ultimately costs aren't escalating because of this wrongheaded, one-sided, suspicious approach. Uh, thank you. I yield back.
▶ 1:31:25I thank the gentleman for yielding. And now I call on uh Miss Hayes from Connecticut for her five minutes of
▶ 1:31:33Thank you. And thank you to the witnesses for testifying today. The work of EPSA is critical to protecting the health and retirement security of more than 156 million workers, retirees, and their families. At its core, EPSA provides protection, education, and oversight of retirement, health care, and other employee benefit plans.
▶ 1:31:53In FY24, EPSA benefit pro advisors help recover more than 540 million in health and retirement benefits owed to workers and their families after closing almost 200,000 inquiries. The 2024 figures represent an increase in inquiries and money recovered by EPSA compared to previous years, illustrating the importance of benefit adviserss for workers and and retirees.
▶ 1:32:18The benefit adviserss who work from the regional field office in Boston are invaluable to assisting constituents in my district in Connecticut. In a recent case, benefit adviserss assisted a Connecticut retirey and assessing $2 million in retirement benefits from a former employer. Despite the tremendous return on investment, the Trump administration is proposing to cut the budget of EPSA by $10 million in FY26 and has laid off probationary and other employees through Doge.
▶ 1:32:48As mentioned in the testimony by Mr. Cower, the Trump administration recognizes the impacts of its proposed cuts to EPSA, providing lower enforcement targets in the 2026 annual performance plan to quote reflect anticipated reductions in staffing end quote. Today, my Republican colleagues are discussing bills that focus on the ability of EPSA to conduct enforcement while ignoring the resources and staffing cuts that are the main barrier to completing those investigations. Mr.
▶ 1:33:17Cower, can you share how the proposed budget cuts by the Trump administration would impact the services and work provided by EPSA benefit adviserss?
▶ 1:33:28Thank you for your question. Um, the benefits advisers are are truly amazing individuals. They are very highly trained. You can call them on a variety of topics. Anything that's covered by Orisa and they will do their best to answer you. And the number of benefit advisors that the agency has um has already shrunken is going to continue to shrink. The volume of calls that they receive is not going to shrink. And so that's going to just mean delays. It's going to mean unanswered calls.
▶ 1:33:56It's going to mean that an agency that took pride that we would get letters where PE constituents remarked, um, I thought I was going to be calling the DMV and I never imagined a government agency would be responsive like this. They are now going to get DMV level service. No offense to anyone that works in the DMV.
▶ 1:34:14I think that leads me to my next question because I want to discuss the additional strain that may be placed on benefit advisors if Congress does not act to extend the Affordable Care Act enhanced subsidies before they expire at the end of the year. Uh throwing the healthcare marketplace into chaos. Among its many important responsibilities, EPSA oversees more than 500,000 benefit plans through the Affordable Care Act and other legislation.
▶ 1:34:39Due to staffing and funding cuts, I'm worried there may not be benefit advisors available to answer phones in regional field offices when people lose their ACA coverage and are looking for help to navigate the options available through their employer. Uh, do you anticipate any in Mr. Cower again for you, do you anticipate any increase in demand for the services of EPSA benefit advisors to help employees navigate health care plans if Congress does not extend uh ACA
▶ 1:35:07Uh, yes, absolutely. I mean, it's it's pretty simple. Um, if your healthcare coverage is more expensive, then you're going to look at other options. That is absolutely going to mean that people are looking at their employer plans, um, they're thinking about these questions during open enrollment. They're contacting benefit advisors.
▶ 1:35:24One of the ways in which in I would say a normal budget environment, EPSA might manage that is by conducting more outreach, going out into communities and doing events to kind of proactively um educate people so that you don't get the calls on the back end.
▶ 1:35:40Um, I don't know what the status is of those, but I would imagine that is one of the areas that'll face pretty significant cuts because if you can't afford people to just answer the phone, sending them out into communities and doing educational events on whether it's the ESOP related stuff or health related stuff that it's hard to find the money for that
▶ 1:35:58a normal budget environment. What a novel concept. I yield back.
▶ 1:36:05The general lady yields. And now I call on our chairman, Mrs. Fox, North Carolina for her five minutes of
▶ 1:36:13Thank you very much, Mr. Chairman. I appreciate that. Mr. Kawir, EBSA, under the Biden Harris administration engaged in burdensome and inefficient investigations that lasted for years and included repetitive document requests, staff turnover, and delayed findings.
▶ 1:36:35Endless and aimless investigations conducted by EBSA wasted precious time and resources and they ultimately hurt American savers. The committee took note, Mr. Kawir.
▶ 1:36:53In September and November 2023, the committee requested a list of all open investigations, the duration of the investigation, the specific purpose of the investigation, and an explanation of all steps taken to close out persisting investigations. In response to these inquiries, DO provided only general explanations, but not underlying data.
▶ 1:37:22In response to the November 2023 request, you provided a briefing to committee staff, but you did not provide any specific information on how long EBSA's state stale investigations have been allowed to remain open.
▶ 1:37:41Your written testimony states there's a lack of significant evidence of problems that need to be addressed which would justify the the two EBSA reform bills that the committee is considerating. Yet EBSA has withheld the information that would allow us to gain a full picture of the problems that need to be addressed.
▶ 1:38:04In addition, we have proof that EBSA secretly shared information from an investigation under what you are calling a quote common interest agreement, but which a court has condemned.
▶ 1:38:21Can you assure us that no one in the Biden Harris DO, whether career or political appointee, passed confidential information or provided assistance to outside attorneys when there was not a common interest agreement in place?
▶ 1:38:42Thank you for your question, Representative. I I mean, I believe this is exactly the subject of an OIG inquiry right now. Um and I think importantly what the IG is looking at is also going to involve hopefully the context of any information sharing. Um there are times when the department has had conversations with um plaintiffs attorneys for example in the context of a common interest agreement.
▶ 1:39:07It is typically where the department um believes that it may be bringing a lawsuit itself and wants to protect any evidentiary privileges. Um unlike in FOYA where disclosure to one is disclosure to all, the the benefit of the common interest agreement is that it allows the the government to kind of maintain the privilege over uh over its
▶ 1:39:31Throughout my questioning, you've appeared to be very uninterested in in the questioning. So, um I hope that what you're saying to us is something you've carefully thought out. We received information from EBSA over a year after our initial inquiry that a total of 54 cases were still open almost eight years after they were open.
▶ 1:39:56Worse, only three of these cases were being actively investigating, meaning the rest were still being held open without You are not in a position to tell this committee that there is no evidence to support additional transparency and oversight at EBSA. Sunlight is the best disinfectant. I yield back, Mr. Chair.
▶ 1:40:26The gentle lady yields now. I call call on ranking member Scott of Virginia for his five minutes of questioning.
▶ 1:40:33Thank you. Thank you, Mr. Chairman. Mr. We've been talking generally about Exactly. What um what are you investigating? What what violations or infractions are you investigating?
▶ 1:40:47Uh thank you for that question. Um I might note at the outset that I have yet to see anyone provide any evidence um when they're talking about timeliness and delays that the agency isn't actually trying to move these cases as quickly as possible. But to answer your question more directly, um when we are talking about investigations, these are investigations into either civil or criminal violations.
▶ 1:41:09In the criminal context, um the easy example I would give you because it tends to, you know, people remember it is the maid off um incidents where there was a Ponzi scheme, retirement savers among others lost a lot of money. Um EPSO was one of the agencies that was investigating that. In the civil context, it could be uh issues around your health insurance premiums not getting paid. they weren't transmitted to the health insurance company and your insurance was canceled. It could be a claim that was denied.
▶ 1:41:36Um, in the retirement context, it could be something um as simple as money not making it to your 401k or as complicated as um we had issues for example uh a number of years ago where foreign exchange transactions that um employee benefit plans were asking the financial services industry to carry out were being carried out on on very very poor terms. So the bank would take advantage of whatever the best rate was of the day.
▶ 1:42:06The customer would get the worst rate of the day. Um and that was not disclosed in any contracts. It was just kind of pure additional compensation that that uh financial entity was was getting for itself. EPS put a stop to that practice.
▶ 1:42:19Um how do you select targets for
▶ 1:42:23Um there are a variety of different ways. Uh one source one very important source is actually the benefits advisor program. A lot of uh referrals come from the benefits adviserss when they're not able to informally resolve a case. They
▶ 1:42:36This is where somebody's complaining to the benefit advisor.
▶ 1:42:39And it is apparent that something is going wrong.
▶ 1:42:43Exactly. So the benefits advisors will try to resolve that but they're not always able to. uh we or the agency has believed it's an important source because you have kind of you have this person calling you, they're telling you something and so there's there's more than um the level of suspicion or or uh belief that you would have otherwise. Um but it's not the only source. There are reports that are filed with the government um and other data sources that the agency has that it kind of mines to figure out where it can devote those resources to get something that's more effective.
▶ 1:43:14We've heard a lot about common interest and working with private lawyers secretly. What does the um EPS law say about u sharing information?
▶ 1:43:29So there is a specific provision in Orisa that allows the uh department to share information with essentially with interested parties. Um frequently that's actually used to share information with the people that you're investigating, right? because you want to tell them information about the investigation. Um, it is also used in the context of these common interest agreements.
▶ 1:43:51I will point out that when we're talking about the context, we should be I think and I'm hoping that the IG report does this is to not just look at kind of a numerical there were this many conversations with, you know, these kinds of parties, but to look at kind of broadly at what's going on and understand what EPSA's role was in these things. I mean, I will tell you my own experience is that I fought I talked far more to people in the defense bar than people in the plaintist bar in the entire time of my um tenure at
▶ 1:44:21Is there anything that you supply that couldn't be gotten by the other side through discovery?
▶ 1:44:29Um I think it's a question of when. Um my understanding um is that for private plaintiffs um they don't um I've never brought a private litigation, but my understanding is that it can sometimes be difficult for them to get their hands on information even when they're entitled to it by law. Um I'm thinking right now of um some guidance that we put out because an insurance company had denied someone's claim.
▶ 1:44:57the attorney wrote to us and said, "I'm not, they have tapes that they're using as the basis of the denial. They're not turning over those tapes to us." We put out some guidance that said that no, that is covered. Um, but that's one example where people wouldn't be able to get information.
▶ 1:45:11And and finally, as when you we've heard that ESOPs are being investigated, what problems can workers have with ESOPS that would require EPSA to intervene? So the primary issue that EPSA looks at is really around the acquisition of the ESOP and the debt that the ESOP or the the entity incurs. Um it's actually quite uncommon for EPSA to investigate ESOPs kind of on an ongoing basis.
▶ 1:45:41I yield back.
▶ 1:45:45Gentleman yields. I now call on our chair conference chair Mlane uh from Michigan for your five minutes of
▶ 1:45:52Thank you Mr. Allen. Thank you all for being here. Um really important as a former business owner. Um understand the importance. Um Mr. um Galenbeck, Mr. Banduchi, and Mr. Bonum, my legislation, EBSA Investigation Transparency Act requires the EBSA to report annually to Congress on investigations in enforcement status. Right.
▶ 1:46:19The report, which will not include the names of any private parties, will include the office that opened the investigation and how long it has been open. I'm curious as how you think how this bill would help your organization's members determine whether they are being treated fairly or not. Right?
▶ 1:46:43because we have all these different regionals and every the sharing of information isn't actually there and we all know some of these um uh cases are open opened way longer than 36 months. So I'd like to know whether uh how you think this legislation would help in in terms of the employers. Mr. You can all answer if you'd like.
▶ 1:47:06Yeah, I I think that that level of transparency can be immensely helpful. There was, you know, number of questions today about the timeliness of investigations. Um, one one issue, and I don't represent a trade organization, I'm just a private attorney, but often in investigations that we're involved in, um, there's no closing letter. So, the department makes a decision. We're not we're going to close the file and my client never hears about it.
▶ 1:47:34So, you know, again, it's one level of transparency to make sure that everyone understands that there's a investigation and it's closed and closed with no results. That would certainly be
▶ 1:47:45Why would anyone oppose that?
▶ 1:47:48I I personally don't do not know.
▶ 1:47:50Thank you.
▶ 1:47:53So, so uh thanks for introducing the legislation as well. We support it for for a number of reasons. Um from a transparency standpoint, obviously our our member companies would uh benefit by being able to see uh for instance uh which regional offices are pursuing what kinds of cases. It helps us on the front end, our members on the front end sort of uh identify those areas where maybe we really need to be need to be looking.
▶ 1:48:19Um from you know, not to get out of my lane, but from an appropriations perspective, I would think it would be absolutely vital for you to have all that information as well. um in particular to to um sort of address concerns about uh you know whether budget cuts or you know how if there were additional funds where those money monies would actually be spent. I think that's uh it's not obvious to me that it would all go to benefits
▶ 1:48:44right? It almost it might help us too regionally on which regions are doing best practices and maybe we could learn from those regions, right? I mean, if you we were transparent, we could say, "Oh my goodness, this region's doing really good. Maybe we could learn instead of trying to get stuff done, we could actually get stuff done." But I'll I'll let you respond.
▶ 1:49:04Nikki, if I might, I I I would say we've heard a lot about how your bill would supposedly disproportionately tax the resources of EPSA, but I I would have to say that, you know, issuing an annual report that inventories the open cases doesn't seem overly burdensome to me. You probably have on your own staff more open constituent case work that you have your staff track for you than EPSA does in the entire agency on an annual basis.
▶ 1:49:33So just the issuance of that type of a report from a management perspective, I would suspect our our members would benefit because it would cause a lot of those cases to be closed when they otherwise would just linger on for
▶ 1:49:46I'm also curious would would it safe to say that the standards in which you hold your members to in terms of compliance, right? You know, I had a business. We actually have more people had more people in our compliance department filling out forms and filing, you know, to to be in compliance than we did actually have in customer service. But if we hold your members to certain standards, don't you think it would be safe to say to hold the government agencies and all these agencies to the same standard?
▶ 1:50:18Well, what a concept, right? Anyone disagree with that? that
▶ 1:50:24no it's it's it's in fact you know part of the the sort of um feedback that we've gotten from our members is that particularly in the in these investigations for example the turnaround in document requests yeah right provide everything right now
▶ 1:50:37right I'm the employer I got to give you everything right now but once I give it to you well you can take as long as you want seems a little unfair doesn't it
▶ 1:50:46it does I I would add to that that there is an ongoing buildup of cost for the employer as well because we have to answer every single year. Do you have any open cases or investigations department of labor when we fill out our insurance forms?
▶ 1:51:01Wouldn't it make sense to hold the the agency accountable too?
▶ 1:51:06Thank you.
▶ 1:51:08The general lady yields. Now I call on ranking member DS of California for your
▶ 1:51:14Thank you, Mr. Chairman. And to the last comments uh before the conference, chair leaves. She's not listening. Um, happy to happy to follow up in a in a dialogue. It consistent with my opening These hearings drive me crazy, too.
▶ 1:51:31Um, as a professional health care patient for the last 10 years, and as a former small business owner, and we've had these conversations multiple times, the chair and I, this is something that just seems so obvious. And unfortunately our current um atmosphere in the Congress doesn't bode well that we will actually come to conclusions. I would say that waiting for the IG report would be very helpful.
▶ 1:51:58Um and hopefully the inspector general will give us a a a real objective way that we can make this belleaguered agency work um given that we have one investigator for every 17,500 plans. So Mr. Quark, give a moment here. um to talk about the cuts in efficiencies and I I would be interested in hearing from private employers.
▶ 1:52:23If you're not going to fund a program to make it efficient, why would you surprise it doesn't work well? So, talk about um the budget cuts and then if you could talk about this um it was Brandeise who said sunshine is the best antidote. Uh but how do we get to that point where it's efficient so everybody has it? this nefarious idea that somehow the employees are getting information and as you said to Mr.
▶ 1:52:51Scott's comments that you're sure not you're not history that's not your history it's you're trying to help with a settlement that is both efficient and is acceptable to both parties. So speak to both um cutting the budget and then we added money in the no surprise act so that helped the budget.
▶ 1:53:07speak to the budget problems, but then this acquis accusation from the majority that there are nefarious things going on that benefit the one side as opposed to working with both sides to a mutually agreed acceptable settlement and
▶ 1:53:23Um, thank you. Uh, I will do my best in the remaining time to answer all of that. um on the budget cuts. I mean, I think it it is ironic uh to have a conversation about additional reporting um at a time when the AY's personnel has been cut so much and the budget cut is important to understand in the context of the personnel cuts that it it creates.
▶ 1:53:49Um, if the agency can only support 640 employees all told, which is what the FY26 budget request is for, that is not just 640 investigators. That's the investigators, that's economists, that's reg writers, that's benefits advisors, that's also people that handle personnel, travel, um, those kinds of things. There's an accounting function. It is everything that the agency does in 640 people.
▶ 1:54:17And at its peak the agency had close to a thousand. So it is in that context tiny uh for the obligations that it has and that the timeliness problem is going to get worse. And I just wish um the conversation we were having um it's not coming at a point where the agency's been given a fair chance to do everything that it can to close investigations in a timely manner for example. Instead it's been resourced starved.
▶ 1:54:45it's been trying to figure out how to make do with less and less and less. Um, and one function is that investigations are going to take longer. That is going to be another consequence of of the budget cuts. Um, on this issue of, you know, the trust um and the relationship between the agency and um and its various stakeholders. Um, I mean I I have a few thoughts. First is just as Mr.
▶ 1:55:14Golic you know uh observed in his opening statement that um you know he doesn't view the agency as playing the same role that it used to. I would say the same is true of the private pl uh private defense bar in particular which has become over the years far more antagonistic. Another cause of untimely investigations is that the private defense bar increasingly tells their um clients that they shouldn't cooperate with EPSA. They shouldn't help us get to the bottom of it.
▶ 1:55:43What we really want to do is get in, get the documents, figure out the problem, fix it, move out. The agency's goal is to solve problems voluntarily. It's in no one's interest for the agency to start bringing lawsuits on everything. And what we want to try and do is um have an efficient process that works for plan sponsors, works for the agency, but importantly also works for participants and make sure that their rights are actually being realized.
▶ 1:56:09Thank you. I yield back.
▶ 1:56:14All right, the gentleman yields and uh I think we have no more questions. Uh I want to uh uh now uh recognize uh the uh well first I'll give my closing statement and then well act the ranking member gives his closing statement. Would you like to uh close out your your side? You did a good job on questions, by the way.
▶ 1:56:42Oh, thank you, Mr. Chairman. Collegiality. Maybe it'll come back, Mr. Banduchi. And then you can come back as well. Well, I I do appreciate that. And although I we've had some serious dis uh disagreements, this is something I think it would really be constructive, Mr. Chairman, to have a conversation about. Um, with the increase in denials that we had hearings about in this subcommittee over the last couple sessions, uh, your predecessor, Mr.
▶ 1:57:08Good, who is no longer a member of Congress, we actually work to try to make corrections in a bipartisan way. But it's so important if we're people are going to be uh not be able to asset access Medicaid. Um, and we have more denials in the in the private in the employer employee section. um having bet on the governing body of a public hospital, you know where people are going to end up. They're going to end up in the emergency room with critical care.
▶ 1:57:37So, if we don't get this right, it affects the whole system. Um if you cut police, unfortunately, there are going to be people who do bad things. You've got to have the appropriate level of funding so that people like Mr. Kir can work in good faith with both parties. So, I would just say, Mr. Chairman, there's an opportunity here.
▶ 1:57:58I'm afraid that um ethical behavior more and more in our culture politically and business-wise is making it harder for us to get people to do the right thing without um regulators and just cons consistently underfunding and demeaning uh public sector employees who are doing a good job doesn't help the situation.
▶ 1:58:20And from my perspective, uh, as opposed to our conversations about our experience in the business sector, um, it's eroding the level of trust. And in this case where you've got denials going going up and the efficiency of the system unfortunately not working, it would be really a wonderful opportunity for us to work together to see if we could fix um some of the challenges we have.
▶ 1:58:46and just defunding it and blaming the people who are left I don't think speaks well to our institution is trying to engage in problem solving. Mr. Banduchi, Mr. Core, I have the feeling in a former setting the two of you could go into a room and negotiate a lot of this for everybody's benefit um particularly the all of the American taxpayers, consumers and high road business um owners both public and private. So with that, Mr. Mr.
▶ 1:59:15Chairman, um, these bills don't solve the problem. I would argue that it would be better for us to take take a deep breath, wait for the Inspector General's report, and engage in constructive bipartisan uh, heavy work of legislating in good faith to see if we can fix the situation before we make it worse. And I will yield back.
▶ 1:59:38Okay. I I thank the ranking member and yes, I agree. we we need to uh get to the bottom of this problem. You know, a couple of uh things that I heard is obviously the the insurance companies are a big problem and of course uh you know somehow in this country we have got to give health care back to our and and and those who are actually treating uh people for
▶ 2:00:09these uh sometimes fatal uh decisions. And so, uh, that's another matter. Uh, but, uh, going forward, the Employment Benefit Security Administration, it's a small agency with vast Uh, and in these conversations, it kind of reminds me the IRS is you're guilty until you prove yourself innocent.
▶ 2:00:37I don't think that's exactly the uh, the jur prudence in our nation. you know, you're supposed to be uh innocent until you're proven guilty. So, uh we've got it backwards uh in many instances here.
▶ 2:00:54Uh it it's important for this agency to use its investigative resources wisely and efficiently and uh you know it needs to be open uh no behind the back behind the scene uh activity. uh employers sponsor retirement plans voluntarily and EPSA should should or voluntary and and EPSA should work with employers to promote and protect employee retirement savings.
▶ 2:01:25Uh Republicans are committed to protecting retirement savings of workers, retirees, and their families. As we learned today, government agencies that resist oversight can run a muck and their actions can harm workers and job Under the Biden Harris administration, EPSA teamed up with class action pliff attorneys to bypass court rules on fair litigation. That is a black eye and it needs to be dealt with.
▶ 2:01:55The legislation we discussed today calls for Sunlight is the best disinfectant. And ranking member, I look forward to working with you and all the members of this committee to providing a workable solution that secures workers retirement. And with that, I yield back.
▶ 2:02:17And uh I would like uh to thank all of our witnesses again for taking the time to testify before the sub commmittee today. And without objection, being no further business, the subcommittee stands adjourned.