September 3, 2019

DOL Will Restructure Employee Benefits Security Administration

On August 28, Bloomberg BNA reported "Labor Boosts Political Staff’s Power in Benefits Arm Shuffle" (subscription required). The changes announced affect the Employee Benefits Security Administration (EBSA), the unit of the Department of Labor responsible for regulation and enforcement of the Employee Retirement Income Security Act (ERISA), which governs ESOPs and other benefit plans. Under the newly announced organizational structure, units of EBSA that had reported to the deputy assistant secretary for program operations, career official Timothy Hauser, will instead report to the deputy assistant secretary, Jeanne Klinefelter Wilson, a political appointee.

The changes, announced by the head of EBSA, Assistant Secretary of Labor Preston Rutledge, in an email to EBSA staff on August 27, will move three offices formerly overseen by Hauser to supervision by Wilson. In addition, the regional offices will report to a new and yet-unnamed deputy assistant secretary. The changes are a substantial revision to EBSA's organizational chart.

Assistant Secretary Hauser has been deeply involved in litigation and investigations of ESOPs, and spoke at the NCEO's 2016 annual conference. The reporters at Bloomberg BNA noted the shift in power toward a political appointee "could prompt action on issues of concern for business groups," although the change's impact on ESOP companies is unclear.