EBSA Notices

Strategic Enforcement Plan   [4/6/2000]
[Federal Register: April 6, 2000 (Volume 65, Number 67)]
[Page 18207-18212]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]

[[Page 18207]]



Department of Labor


Pension and Welfare Benefits Administration


Strategic Enforcement Plan; Notice

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Pension and Welfare Benefits Administration

Pension and Welfare Benefits Administration; Strategic 
Enforcement Plan

AGENCY: Pension and Welfare Benefits Administration, Department of 

ACTION: Notice.


SUMMARY: The Pension and Welfare Benefits Administration (PWBA) is 
publishing this Strategic Enforcement Plan (StEP) for the purposes of 
informing the public of its current goals, priorities, and methods, and 
promoting compliance with Title I of the Employee Retirement Income 
Security Act of 1974, as amended (ERISA). The primary purpose of the 
StEP is to establish a general framework through which PWBA's 
enforcement resources may be efficiently and effectively focused to 
achieve the agency's policy and operational objectives.

EFFECTIVE DATE: This Strategic Enforcement Plan is effective on April 
6, 2000.

FOR FURTHER INFORMATION CONTACT: Virginia C. Smith, Director of 
Enforcement, (202) 219-8840 (this is not a toll-free number).


I. Statutory Framework

    The Employee Retirement Income Security Act (ERISA), enacted in 
1974, prescribes uniform minimum standards to ensure that employee 
benefit plans are fair and financially sound and provide workers with 
the benefits promised by their employers. The law covers most private 
sector employee benefit plans that are voluntarily established and 
maintained by an employer, an employee organization, or some 
combination of these. Pension plans--a major type of employee benefit 
plan--provide retirement income or defer income until the employee 
stops working or sometime later. Other employee benefit plans are 
called welfare plans; these provide health, disability, and other 
similar benefits.
    Three federal agencies play a role in administering ERISA. The 
Internal Revenue Service oversees the tax code provisions of the law. 
The Pension Benefit Guaranty Corporation (PBGC) administers the 
federally-sponsored insurance provisions covering defined benefit 
pension plans. The third agency, the Pension and Welfare Benefits 
Administration within the Department of Labor, has principal 
responsibility for administering Title I of ERISA. ERISA confers 
substantial law enforcement responsibilities on PWBA, giving PWBA the 
authority to conduct investigations and to seek appropriate remedies to 
correct violations of the law, including litigation where necessary.
    Title I of ERISA sets forth standards and rules governing the 
conduct of plan fiduciaries. In general, people who exercise 
discretionary authority or manage a plan or have authority to dispose 
of its assets are ``fiduciaries'' for purposes of Title I of ERISA. 
Fiduciaries are required, among other things, to discharge their duties 
solely in the interest of plan participants and beneficiaries and for 
the exclusive purpose of providing benefits and defraying reasonable 
expenses of administering the plan. In discharging their duties, 
fiduciaries must act prudently and in accordance with the documents 
governing the plan, to the extent such documents are consistent with 
ERISA. Certain transactions between an employee benefit plan and 
``parties in interest,'' which include the employer and others who may 
be in a position to exercise improper influence over the plan, are 
prohibited by ERISA.

II. Organization of PWBA'S Enforcement Program

    PWBA enforces ERISA by conducting investigations through its ten 
regional offices and five district offices located in major cities 
around the country.\1\ These field offices conduct investigations to 
gather information and evaluate compliance with ERISA's civil law 
requirements as well as criminal law provisions relating to employee 
benefit plans. Except in those cases involving national priorities, 
projects, enforcement policy, or other designated matters, the field 
offices generally exercise broad discretion in determining when 
investigations are to be opened and which entities or individuals are 
to be investigated. The field offices conduct their investigations in 
accordance with established enforcement procedures.

    \1\ PWBA regional offices are located in Boston, New York, 
Philadelphia, Atlanta, Cincinnati, Chicago, Dallas, Kansas City, San 
Francisco, and Los Angeles. PWBA district offices are located in 
Washington, D.C., Miami, Detroit, St. Louis, and Seattle.

    Each PWBA field office coordinates civil investigations and case 
referrals with its local Regional Solicitor's Office (RSOL) or with the 
Plan Benefits Security Division (PBSD) of the Solicitor's Office in 
Washington, DC, which are responsible for bringing civil lawsuits on 
behalf of the agency.
    PWBA's Office of Enforcement (OE), located in Washington, DC, 
communicates national enforcement policies, priorities, and procedures 
to PWBA's field offices. OE is responsible for operational review and 
oversight, enforcement policy direction, program coordination, and 
technical assistance.

III. Purpose and Scope of the Strategic Enforcement Plan

    During fiscal year 1999, PWBA had fewer than 400 investigators, the 
front-line staff who identify and investigate civil and criminal 
violations relating to employee benefit plans. With over 700,000 
pension plans and 4.5 million welfare plans, PWBA must use its 
investigative staff effectively to protect the more than $4.3 trillion 
in assets contained in private employee benefit plans. For this reason, 
a 1995 report by the Brookings Institution referred to PWBA as probably 
the most highly leveraged agency in the U.S. government.\2\

    \2\ ``Cutting Government,'' A Report of the Brookings 
Institution's Center for Public Management, May 22, 1995.

    The primary purpose of PWBA's Strategic Enforcement Plan (StEP) is 
to establish a general framework through which PWBA's enforcement 
resources may be efficiently and effectively focused to achieve the 
agency's policy and operational objectives. The StEP identifies and 
describes PWBA's enforcement priorities; the planned allocation of 
enforcement resources to carry out these priorities is established 
yearly in an operational plan. PWBA intends to reference this StEP when 
it exercises its enforcement discretion; however, the StEP does not 
create or confer any rights, duties, obligations, or defenses, implied 
or otherwise, on any person or entity.
    Because of the substantial demands that are placed on PWBA's 
limited investigative resources, the StEP establishes broad policy 
criteria to ensure an appropriate balance of priorities while 
maintaining the highest possible standard of operational efficiency. 
Within the framework of these criteria, each region may exercise 
discretion in allocating investigative resources, provided appropriate 
resources are allocated to implement national projects and other 
designated items, such as emerging issues and high profile 
investigations which warrant special attention. National investigative 
priorities and projects are identified and developed with participation 
of field office management.

IV. Enforcement Strategy

    In fiscal year 1997, the Secretary of Labor established three 
strategic goals

[[Page 18209]]

for the Department of Labor: A Prepared Workforce; A Secure Workforce; 
and Quality Workplaces. PWBA's enforcement strategy is designed to 
support the strategic goal of a secure workforce by deterring and 
correcting violations of ERISA and related statutes. PWBA supports the 
goal of a secure workforce by other means as well, such as the 
development of the ERISA Filing Acceptance System for Form 5500 annual 
reports, educating the pension and welfare benefits community, and 
providing individual assistance to participants.

A. Targeting

    The term ``targeting'' refers to the PWBA process whereby specific 
individuals or entities are identified for investigation because of 
some indication that an ERISA violation may have occurred or may be 
about to occur. For example, the targeting process could be as simple 
as opening a single investigation based on information received from a 
plan participant whose benefits are past due or it could involve 
opening hundreds of cases based on the computer-generated results of 
Form 5500 review and analysis.
    Because there are over five million private employee benefit plans 
under PWBA's jurisdiction, targeting is essential to effectively use 
PWBA's limited investigative resources. Targeting focuses PWBA 
resources on those situations, issues, individuals, or entities where 
the most serious potential for ERISA violations is likely to exist.
    PWBA strives to establish targeting methods that focus 
investigative resources in areas that are most likely to uncover 
abuses. Because evaluating ERISA violations usually involves applying 
legal standards to complex factual scenarios, the challenge in 
constructing effective targeting methods is to identify factors that 
can be used to pinpoint specific plans (e.g., those with delinquent 
forwarding of employee contributions), individuals, and other entities 
in violation of the law.
    Once the type of conduct and the individual or entity is 
identified, the field office must decide whether to formally open an 
investigation. This determination may be based on a number of 
considerations such as the egregiousness of the conduct, the amount of 
money or property at risk, or the number of participants potentially 
affected. Although the field offices are generally responsible for 
identifying potential investigative targets and determining which cases 
are to be opened, in certain cases these activities may be coordinated 
with OE.
    PWBA must apply its investigative resources in a manner that will 
result in prompt and effective enforcement actions, and timely results. 
OE and field office managers determine how cases are to be 
investigated, evaluated, and resolved to achieve this goal. In some 
cases field office managers must determine whether to pursue an issue 
civilly, criminally, or both simultaneously. In addition, the 
investigators are responsible for implementing investigative methods 
designed to achieve timely monetary or injunctive relief, as 
appropriate. In some cases, the most effective approach may require 
referral to another state or federal agency because of the legal issues 
involved. In determining which course of enforcement action to pursue 
or which method to apply to prevent, redress, or punish illegal 
behavior, PWBA will consider all available options and strive to follow 
the best alternative available.

B. Protecting At-Risk Populations

    Employee benefit plans provide income and services on which 
individuals rely for their quality of life, often to a critical degree. 
The financial security of an individual or a family may be jeopardized 
if pension, health, or other benefits are not paid as promised. Medical 
benefit plans provide not only for the physical well-being of 
individuals, but often provide access to services which individuals 
might not otherwise be able to afford.
    PWBA seeks to identify situations and apply its enforcement 
resources to protect those employee benefit plan participants and 
beneficiaries whose security and livelihood are in the greatest danger 
of being harmed as a result of ERISA violations. Such methods focus on 
those situations where participants and beneficiaries are most 
susceptible to actual loss of benefits, or where ``populations'' of 
plan participants are potentially exposed to the greatest risk of 
falling victim to unlawful conduct.
    All of PWBA's field offices engage in outreach efforts which are 
designed to assist potentially vulnerable populations such as 
participants who might have otherwise lost coverage or benefits (e.g., 
employees whose benefits are affected by plant closings, or employers 
who might be victimized by unscrupulous health care promoters) or plans 
for which benefits are not federally insured, such as 401(k) plans. 
These outreach efforts may involve speaking at conferences and seminars 
sponsored by trade, professional, and educational groups or 
participating in outreach and educational efforts in conjunction with 
other federal or state agencies.\3\ Educating participants and 
beneficiaries about their benefits, rights, and the availability of 
PWBA's enforcement authority helps establish an environment where they 
can help protect their own benefits through recognizing potential 
problems or notifying PWBA in appropriate situations.

    \3\ In July 1995, PWBA launched its national pension education 
campaign to inform and encourage people to make educated choices 
about retirement planning, especially small business owners, young 
people, low wage workers, women, and minorities. This information 
campaign was supplemented in December 1998 by PWBA's national health 
benefits education campaign, which is designed to help people 
understand their medical benefits when they experience changes in 
life and work.

    Although PWBA seeks to protect the benefits of plan participants 
and beneficiaries that are at actual risk of loss, in some cases an 
investigation will be conducted even where benefits do not appear to be 
at risk. For example, a health care service provider may pay a plan 
fiduciary a ``kickback'' in exchange for the fiduciary's selecting that 
entity over another. Enforcement action is warranted in such cases to 
ensure the integrity of the system even though the plan participants 
and beneficiaries incurred no actual harm. Situations involving self-
dealing, conflicts of interest, and gross imprudence are examples of 
other types of violations that may warrant investigation even in the 
absence of demonstrated harm to plan participants.

C. Deterring Violations

    Almost all enforcement programs hope to deter people from violating 
the law. PWBA seeks to deter illegal conduct through the continuing 
effectiveness of its civil and criminal enforcement efforts. PWBA 
actively publicizes its litigation, which has proven useful in 
encouraging voluntary compliance by others.
    While PWBA seeks to recover losses incurred by participants, it 
also seeks to maintain the financial and operational integrity of the 
private employee benefit plan system. Doing so has sometimes involved 
conducting investigations that address potentially abusive practices 
which may not involve actual losses to the plans or participants.\4\ 
Because such projects are effective at changing certain types of 
behavior, this approach will

[[Page 18210]]

continue to be used by PWBA under selected circumstances.

    \4\ An example of such a project was the enforcement initiative 
relating to corporate governance issues, known as the Proxy Project. 
While the Proxy Project did not result in any monetary recoveries on 
behalf of plans, it was enormously successful in educating the ERISA 
community regarding their legal responsibilities under ERISA with 
respect to the voting of proxies.

    PWBA also has responsibilities for enforcing the criminal 
provisions contained in ERISA and violations under Title 18 of the U.S. 
Code which affect employee benefit plans. In pursuing criminal 
violations, PWBA staff work with the local U.S. Attorneys' Offices, as 
well as other law enforcement agencies, to support effective 
prosecution and sentencing. After a conviction is obtained, PWBA is 
diligent in ensuring that the statutory bar provided for in section 411 
of ERISA is applied. This section of ERISA generally prohibits any 
person who has been convicted or imprisoned for any of the enumerated 
criminal offenses from serving in virtually any capacity relating to an 
employee benefit plan for 13 years after conviction or completion of 
    On March 15, 2000, PWBA adopted its Voluntary Fiduciary Correction 
Program, which encourages the voluntary correction of certain 
violations of Title I of ERISA. The program allows plan officials to 
identify and fully correct thirteen transactions, such as prohibited 
purchases and sales, improper loans, delinquent participant 
contributions, and improper plan expenses. If an eligible party 
documents the acceptable correction of a transaction, PWBA will issue a 
no-action letter, and will not initiate a civil investigation under 
Title I of ERISA regarding the applicant's responsibility for any 
transaction described in the no-action letter. PWBA expects this 
program to facilitate corrections by plan officials who want to come 
into compliance with the law with respect to their past practices, and 
promote better compliance in the future.

V. Implementing the Enforcement Strategy

    PWBA's enforcement strategy is implemented through the guidance in 
this document, the StEP, and at a working level through the agency's 
annual performance goals, developed by the field offices in 
coordination with OE. The annual performance goals translate the 
general policy guidance articulated in the StEP into practical 

A. Civil Investigations

    PWBA's enforcement program is primarily carried out through civil 
investigations. PWBA organizes its civil investigative program using 
two main approaches: (i) national projects, which are investigative 
projects that further more broadly established long-range national 
investigative priorities, and (ii) regional projects which are 
localized investigative projects undertaken by individual PWBA regional 
1. National Investigative Priorities
    PWBA establishes national investigative priorities to ensure that 
its enforcement program focuses on the areas that are critical to the 
well-being of employee benefit plans. Types of plans, benefits, or 
other broad segments of the regulated employee benefit plan universe 
are identified and designated for emphasis by PWBA's enforcement 
program. These areas will generally be designated for emphasis over 
several years. Each year, PWBA identifies specific national 
investigative projects, within these national investigative priorities, 
to which it will dedicate enforcement resources. These projects are 
designed to identify and correct ERISA violations which PWBA believes 
may be widespread or to focus on possible abusive practices that may 
affect many plans.
    There are three current national investigative priorities: plan 
service providers, health care plans, and defined contribution pension 
    a. Plan Service Providers. The term ``plan service provider'' 
refers to any person or entity which provides a direct or indirect 
service to an employee benefit plan for compensation. Third party 
administrators, accountants, attorneys, and actuaries are plan service 
providers. Plan service providers also include financial institutions 
such as banks, trust companies, investment management companies and 
insurance companies as well as others that manage or administer, 
directly or indirectly, funds or property owned by employee benefit 
    Investigations of plan service providers offer the opportunity to 
address abusive practices that may affect more than one plan, and by 
focusing investigative resources on plan service providers, PWBA can 
address violations involving many plans. Because such investigations 
generally result in larger recoveries for more plans and more 
participants, this approach provides a mechanism whereby PWBA can 
leverage its resources and obtain the maximum impact for the benefit of 
plan participants and beneficiaries.
    When investigating plan service providers, PWBA generally focuses 
on the abusive practices committed by the specific service providers 
rather than the plans. For example, where a third party administrator 
has systematically retained an undisclosed fee, generally the focus 
will be on the third party administrator rather than the plan that 
contracted for the services. Because the investigation of plan service 
providers offers the opportunity to leverage available staffing, the 
field offices are encouraged to allocate appropriate resources to the 
targeting and investigation of these issues or entities.
    b. Health Benefit Issues. The Department has estimated that there 
are a total of 2.6 million ERISA-covered health plans, covering 
approximately 122 million participants and beneficiaries. In recent 
years several factors have combined to make the management and 
administration of ERISA-covered health plans a matter of vital national 
importance, including increased health care costs (due in part to 
improved technology and accessibility); changes in the health care 
delivery and funding systems; and the evolution of the legal standard 
under which health plans and their service providers must operate. As 
the cost of health care has increased, the methods for delivering that 
care have changed. In general, the increase in health care costs is 
regarded as a key factor in the move toward managed care which is 
designed to control access to health care and its related costs.
    PWBA seeks to ensure that plans and the benefits of their 
participants and beneficiaries are protected. The application of 
available remedies under ERISA is critical in those cases where federal 
preemption leaves participants with no other effective statutory or 
common law cause of action. PWBA seeks to apply the full extent of 
ERISA's remedies and to promote a legal standard that will increase the 
availability of appropriate remedies to protect plans and their 
participants and beneficiaries.
    Because of the critical importance of the health benefits area, 
PWBA has in recent years applied substantial resources to addressing 
abusive practices that violate ERISA, pursuing enforcement actions 
involving multiple employer welfare arrangements (MEWAs), and insurers 
and service providers who receive hidden discounts. PWBA's role in the 
health care area has also expanded as a result of the enactment of new 
legislation that includes regulatory and enforcement requirements to be 
implemented by PWBA, including:
     The Health Insurance Portability and Accountability Act of 
1996 (HIPAA), which amended ERISA to provide for, among other things, 
improved portability and continuity of health insurance coverage 
provided in connection with employment;
     The Newborns' and Mothers' Health Protection Act of 1996 
(NMHPA), which amended ERISA to establish minimum

[[Page 18211]]

requirements for hospital stays relating to childbirth;
     The Mental Health Parity Act of 1996 (MHPA), which amended 
ERISA to establish certain minimum requirements relating to mental 
health coverage; and
     The Women's Health and Cancer Rights Act (WHCRA), which 
amended ERISA to provide new protections for patients who elect breast 
reconstruction in connection with a mastectomy.
    In the wake of these and other legislative amendments to ERISA, 
PWBA will continue to devote substantial enforcement resources to the 
targeting and investigation of fiduciary issues relating to health 
benefit issues.\5\

    \5\ In December 1999, PWBA created the Office of Health Plan 
Standards and Compliance Assistance to develop regulations, 
interpretive bulletins, opinions, forms, and rulings relating to 
health care portability, non-discrimination requirements, and other 
related health provisions.

    c. Defined Contribution Plans. There are two major types of pension 
plans under ERISA. In a defined benefit plan, the plan sponsor makes 
contributions to a fund and those contributions are intended to provide 
a promised level of benefits upon retirement. The amount of benefits 
paid is usually based upon a formula. With this type of plan the plan 
sponsor is responsible for managing the assets in the fund to ensure 
the amount is sufficient to pay benefits in the future. If the amount 
of funding in the plan is not sufficient to pay future benefits the 
plan sponsor is responsible for the short fall. These types of plans 
are also covered by termination insurance issued by the PBGC.
    In contrast, defined contribution plans are plans where the plan 
sponsor and/or the participant makes contributions to an account and 
the amount paid to the participant upon retirement is determined by the 
amount of funds that have accumulated in the account. Participants in 
defined contribution plans bear the risk of investment loss, whereas in 
defined benefit plans that risk is borne primarily by the plan sponsor 
or the PBGC and only secondarily by the participant, if on plan 
termination the sponsor is bankrupt and PBGC insurance does not cover 
the benefit. Because defined contribution plans are not covered by PBGC 
insurance, if a plan experiences losses due to a fiduciary breach the 
plan participants are directly affected and, unless the funds can be 
recovered through enforcement or other legal actions, that loss will be 
    In recent years there has been a tremendous growth of 401(k) type 
of defined contribution plans in terms of the number of plans, number 
of participants, and amount of assets in these type plans. This growth 
and the related administrative and investment practices which have 
developed to accommodate these plans warrant scrutiny to ensure the 
safety of this large volume of assets.\6\ PWBA has identified defined 
contribution plans as a national enforcement priority because the risk 
of loss in such plans rests entirely on the plan participants.

    \6\ In July 1998, PWBA released A Look at 401(k) Plan Fees, a 
19-page educational booklet, to help consumers understand the fees 
and expenses associated with 401(k) plan accounts.

2. National Projects
    National projects are investigative projects focusing on a selected 
issue or group of related issues which fall within the established 
national enforcement priorities. Once an issue or group of issues has 
been designated as a national project each PWBA field office generally 
must give priority to conducting investigations and dedicating 
appropriate resources to the project during the fiscal year. Although 
national projects are intended to focus on issues of national scope and 
significance, specific projects may on occasion address issues that are 
not necessarily prevalent in all areas of the country and the 
participation of only a selected group of PWBA field offices may be 
    The issues selected for implementation as national projects are 
determined (or reviewed, since an individual national project may 
extend over more than one fiscal year) with the input of PWBA's field 
offices in annual planning sessions. National projects may originate as 
an expansion of a successful regional project or arise in connection 
with field office investigations. For example, one national project 
which has been ongoing for a number of years is the investigation of 
multiple employer welfare arrangements (MEWAs).
    Coordination and enforcement policy determinations for national 
projects are generally directed through OE. Such direction is conducted 
with substantial participation and opportunity to comment by the field 
office managers. OE's involvement in national projects includes 
monitoring and evaluating the project's progression and, where 
appropriate, issuing procedural directives and technical guidance.
3. Regional Projects
    Enforcement initiatives are also conducted as projects by 
individual regions. Each year the field office managers submit their 
project proposals to OE for review and approval. The subjects selected 
for regional projects are generally topics that have been identified by 
a particular region as constituting an enforcement issue that may be 
unique or particularly problematic within its geographic jurisdiction. 
Because the field staff may be able to identify potential issues 
through their investigative activities, the regions have the unique 
opportunity to observe industry practices first hand and select issues 
for development as regional projects which may ultimately be 
appropriate for adoption as national projects. Normally, an issue 
selected as a regional project will be:
     Well-defined both in terms of scope and focus rather than 
couched in terms of broad categories, such as ``small plan issues'';
     Identified in the context of a type of transaction or 
industry practice; or
     An emerging concern or involving a legal position that is 
precedential in nature.
    In addition a regional project should be amenable to the 
development of an effective targeting method so that an appropriate 
number of subjects can be identified for investigation. As noted 
previously, any number of targeting methods may be used.
    Regional projects that satisfy these criteria provide a foundation 
for identifying cutting-edge issues that may be found to involve 
matters of national scope and importance. If subsequently selected as a 
national project, the experience and insight gained at the field office 
level will provide a substantive basis for guiding other field offices 
in conducting similar investigations. Some regional projects address 
practices that are more localized in their scope and impact. Because 
the demographics of each region differ in the concentrations of various 
types of plans and service providers, the same strategy is not optimal 
for all offices.

B. Criminal Investigations

    Section 506(b) of ERISA gives the Department responsibility and 
authority to detect and investigate and refer, where appropriate, 
criminal violations related to Title I of ERISA and other federal laws, 
including the detection, investigation, and appropriate referrals of 
related violations of the federal criminal code. The number of criminal 
investigations and prosecutions pursued by PWBA has increased 
substantially in recent years and it is expected the number of cases 
and indictments will continue to grow. In particular, PWBA's role in 
investigating criminal violations involving health care plans is 
expected to grow with the recent addition of several new criminal 
provisions relating to health care plans.

[[Page 18212]]

    The prosecution of criminal acts relating to employee benefits 
plans is a critical part of PWBA's enforcement program. PWBA is 
committed to maintaining a strong criminal enforcement program by 
conducting criminal investigations to detect violations that affect 
employee benefit plans and to assist United States Attorneys and state 
prosecuting attorneys in their prosecution of such cases. Each of the 
PWBA field offices maintains on-going involvement in criminal 
investigative activity.
    The U.S. Criminal Code includes several provisions that 
specifically address violations relating to ERISA-covered pension and 
health plans. The three major criminal provisions applicable to both 
pension and health plans are:
     Section 664, relating to theft or embezzlement from an 
employee benefit plan;
     Section 1027, relating to false statements and concealment 
of facts relating to documents required by ERISA; and
     Section 1954, relating to the offer, acceptance, or 
solicitation to influence operations of an employee benefit plan.
    The federal criminal code contains several other provisions that 
have been applied in connection with criminal acts involving employee 
benefit plans, such as the mail and wire fraud provisions (sections 
1341 and 1343) and money laundering prohibitions (sections 1956 and 
    HIPAA created four new federal crimes specifically relating to 
health care benefit programs. The four new provisions establish 
criminal penalties relating to general health care fraud (section 
1347); theft or embezzlement relating to health care (section 669); 
false statements relating to health care (section 1035); and 
obstruction of criminal investigations of health care offenses (section 
1518). HIPAA also amended the federal criminal code sections relating 
to money laundering and racketeering to address health care offenses. 
Amendments to the criminal asset forfeiture provisions now establish a 
process for restoring funds to ERISA-covered health plans.
    Criminal cases are targeted in various ways, including systematic 
methods (such as the analysis of computer data), information obtained 
through a civil investigation, leads from individuals (such as plan 
participants, plan officials, or informants), media sources, or 
information obtained from other government agencies. The field offices 
are encouraged to maintain effective working relationships with other 
law enforcement agencies, such as the local U.S. Attorneys' offices, 
the Federal Bureau of Investigation and the Office of the Inspector 
General. PWBA maintains close contacts and coordinates with these and 
other federal and state law enforcement agencies both in connection 
with identifying potential investigative targets as well as in the 
course of conducting investigations and pursuing prosecution, when 
    Once such leads have been identified and illegal conduct is 
indicated or suspected, the field office managers are responsible for 
determining whether an investigation should proceed criminally, 
civilly, or both simultaneously. Because the same facts giving rise to 
fiduciary violations in civil investigations may also give rise to 
criminal violations, as a matter of course, PWBA determines whether 
there are criminal issues to be pursued in connection with its civil 
investigations. If such issues are believed to potentially exist, a 
criminal investigation will be pursued and, as appropriate, the cases 
will be coordinated with the appropriate U.S. Attorneys' offices to 
seek indictments and convictions. Regardless of whether a criminal 
investigation has been formally opened, evidence obtained by PWBA 
indicating a potentially criminal act will be referred to the 
appropriate U.S. Attorney's office.

VI. Measurement of Program Results

    The Government Performance and Results Act of 1993 (GPRA) requires 
the federal government to improve its performance and increase its 
results. Under GPRA, all federal agencies are required to develop 
multi-year strategic plans, prepare annual performance plans to 
implement the strategic plans, and provide annual reports that compare 
actual performance with stated goals. The StEP is designed to help 
achieve GPRA's mandates by structuring PWBA's general policies in a 
manner that will improve compliance results though the timely, 
efficient, and effective operation of its enforcement program.
    GPRA requires the establishment of measurable goals against which 
performance can be evaluated. In the ERISA enforcement area the 
measurement of performance in terms of improved compliance is 
complicated by the absence of an established base level of non-
compliance. With over 700,000 pension plans and four million welfare 
plans, no such baseline of compliance has been established. Like other 
enforcement and regulatory agencies, PWBA has struggled with this issue 
for some time. The establishment of pure baseline data regarding the 
incidence of violations remains a major obstacle. Therefore, PWBA has 
selected performance measures which highlight the most important 
activities of the enforcement program, measures that challenge the 
agency to improve the efficiency and effectiveness of its ongoing 
programs as well as to address new and important initiatives.
    PWBA has made significant progress assembling baseline data for 
these performance measures which are included in the PWBA Strategic and 
Annual Performance Plans. For example, the agency has established 
baselines for measures such as the number of fiduciary investigations 
closed where plan assets are restored and where prohibited transactions 
have been corrected, closed investigations where plan assets have been 
protected from mismanagement and risk of future loss is reduced, and 
the ratio of closed civil cases with corrected violations to total 
civil cases closed.
    The PWBA Strategic Plan for FY 1997-FY 2002 is located on PWBA's 
web site at www.dol.gov/dol/pwba/public/gpra/main.htm. For a hard copy, 
contact PWBA's Public Disclosure Room, at 202-219-8771.

    Signed at Washington, D.C., this 3rd day of April, 2000.
Leslie B. Kramerich,
Acting Assistant Secretary, Pension and Welfare Benefits 
[FR Doc. 00-8504 Filed 4-5-00; 8:45 am]