Employee Benefits Security Administration
What it is:
How it works (Example):
The United States Department of Labor ensures that the American workforce is treated fairly and is compensated in accordance with the law.
Since the introduction of employee savings plans in the early 1980s, plans such as the 401(k) and the 403(b) enable American workers to save a tax-exempt portion of their pay toward their retirement by way of a managed investment account. However, such plans have also opened up a new avenue for potential mismanagement and embezzlement of employee assets.
EBSA functions as the regulating body that ensures that embezzlement and mismanagement of assets does not take place. EBSA sets regulations concerning how plan funds may be invested and reported for taxation and compliance.
Employee assets under management, for example, must be periodically reported to EBSA to ensure compliance. Each company must submit all relevant information on employees' savings accounts to demonstrate that all transactions and withholdings are being administered according to EBSA regulations.