Shutdown leads retirement plan regulator to hit pause

Thanks to the shutdown of the federal government, the Labor Department's Employee Benefits Security Administration likely will have to hit the “pause” button on certain investigations and enforcement actions.

Generally, federal employees are unable to work if there is no funding available, but some exception can be given to staffers who are deemed absolutely essential.

“The vast majority of government employees can't work, so most routine functions for EBSA are on hiatus until the shutdown is resolved,” said Bradford Campbell, an attorney with Drinker Biddle & Reath LLP and a former assistant secretary of the EBSA, which oversees retirement plans and enforces the Employee Retirement Income Security Act of 1974

“For cases that were in the midst of litigation over the past week, the Labor Department has been filing with the courts to ask for extensions,” Mr. Campbell added. “They've been preparing for some of this, but at the same time, they have the authority to take action in extraordinary situations.”

Not all investigators are deemed essential workers. Those who aren't will likely stop working on their cases until the funding issue is resolved.

“If [investigators] are dealing with a timeline, say a statute of limitations, then they are addressing it,” said Steve Barr, a spokesman with the Labor Department. “If there is a criminal investigation before a grand jury, then they're trying to be responsive. If there is a bankruptcy filing coming in, they look at it to make sure there is nothing that warrants their attention.”

Mr. Barr added: “They are doing some investigative work, but not all of it: it needs to be a pressing matter.”

The EBSA last month proposed having 85 of its field and national office staff members declared “excepted” or “intermittently excepted” from the furloughs.

“This limited number of staff is needed in order to continue to perform excepted and 'by necessary implication' activities arising from the Secretary's criminal authority under ERISA,” wrote Alan D. Lebowitz, deputy assistant secretary for program operations, in a Sept. 12 memo to Labor solicitor Patricia Smith.

Those workers also could respond to emergencies and handle “imminent threats to human life when medical benefits are denied in life-threatening situations,” Mr. Lebowitz wrote in his memo.

Of the 85 employees who were proposed to be exempted from the furlough, 46 were needed to handle criminal cases involving ERISA plans, pursue civil proceedings and address life-threatening scenarios due to the denial of health or disability benefits by an ERISA plan. The remaining 39 employees are on an “i! ntermittent exceptions” list to perform specific activities, such as ensuring the agency's technology services continue running or participating in an criminal case.

In the end, some 46 EBSA workers out of 986 onboard are expected to remain during the shutdown, per the memo.