00:00I call on Ms. Lee from Pennsylvania for your five minutes of questioning.
00:06Thank you, Mr. Chair.
00:08Today's hearing is framed as a conversation about restoring trust
00:11and enhancing transparency at the Employee Benefit Security Administration.
00:16But what's really in question here is whose trust is being restored, not whose expense.
00:22Unfortunately, the majority seems to think that restoring trust means making life easier for employers under investigation.
00:28To them, balancing the scales means tipping them further towards corporations and away from the workers.
00:37EPSA, their core mission is to protect workers' retirement and health benefits, not to cater to employers.
00:45Imagine working your entire career.
00:47You make it to retirement, but you find that all your savings are gone because your employer or your benefits manager lied,
00:55not misused your funds, or just outright stole from your plan.
01:00EPSA exists to put rules in place to help prevent this from happening.
01:04And when those rules are broken, EPSA has the authority and the responsibility to hold these employers or plan managers accountable.
01:10Over the years, EPSA's workforce has steadily declined, and its responsibilities have increased,
01:15all while its funding has remained flat.
01:17Even so, EPSA is still taking meaningful enforcement actions to protect workers' benefits.
01:22Mr. Kohar, could you just discuss, very briefly, because I also want to make sure that we can hit a couple things,
01:30but can you discuss some of the complexities in investigating and concluding a case,
01:34particularly what factors might slow things down?
01:36Yeah, thank you for your question.
01:39I will try to be brief, but it is, there is a lot.
01:42Understood.
01:43So, the size and complexity of the entity being investigated, the volume of evidence that they produce,
01:50what that evidence shows, including, you know, there is not a practice that if you ask a question about X
01:56and then you get evidence of wrongdoing somewhere else that we ignore it.
02:00So, it may lead to additional document requests or questions, how cooperative the entity is.
02:06It's not infrequent that EPSA starts with voluntary production of documents and then doesn't get the documents that it asked for,
02:13needs to move to a subpoena, needs to enforce that subpoena in court.
02:17All of that is leading to delays between when the investigation opens and when EPSA is kind of done with just the very first stage,
02:25which is they have a conclusion of what they think has happened.
02:29They present that to the fiduciaries and say, these are our findings, can we talk about how we proceed?
02:34And if I could add, just what impact will the agency's proposed budget cuts have on the department's ability to close those cases quickly then?
02:41I mean, I think given the severity of the cuts that we've seen just in this year,
02:45there'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,
02:54or you just close them even though you're convinced that there's something there and people have been harmed?
02:58So instead of cutting funding, we should be strengthening this agency?
03:02Because 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,
03:10slowing investigations, shielding employers, and draining resources that should be used to protect those workers.
03:16Mr. Carr, in your testimony, you stated for every dollar that Congress invests in EPSA,
03:20the agency has consistently returned many multiples of that amount in direct payments to plans, participants, and beneficiaries.
03:27Is that...?
03:28Yeah, I mean, one figure is $17,000 approximately per investigator per day.
03:34Another figure for one specific category of cases shifted to, in light of budget cuts,
03:41trying to find more impactful cases that were going to impact more people.
03:45The number for that is about $150,000 per investigator per day.
03:50Mm-hmm.
03:51So, in other words, cutting EPSA's funding actually costs taxpayers and workers more money.
03:56So why are we uplifting bills that would further drain EPSA's resources through burdensome reporting requirements
04:02while doing nothing to help workers recover their stolen benefits?
04:05I can speak to EPSA's importance firsthand.
04:08In my district, a Pittsburgh-area administrator overseeing 240 or so retirement plans,
04:14embezzled at least $5.5 million from workers' accounts.
04:17EPSA stepped in and took swift action, freezing the assets and securing court orders,
04:22led to a $50 million settlement and likely saved my constituents millions more.
04:28Yet, instead of supporting EPSA's critical work such as this, the majority wants to undermine it.
04:33Today's bills don't restore trust or improve transparency.
04:38They shift EPSA's focus away from defending workers' benefits and towards easing the burdens on employers.
04:44They frame investigations as too long, without regard for the complexity or for the stakes.
04:49And they call for transparency measures that actually make it harder for EPSA to do its job,
04:54shielding employers from scrutiny while creating new hurdles for enforcement.
04:58If this committee is serious about restoring and improving the function of EPSA,
05:03the solution is clear, increasing the agency's funding.
05:06That's how you build trust, not just with employers, but with the workers whose futures are on the line.
05:10I thank you all so much for your time, and I yield back.
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