New Bill 'Balance the Scales Act' Mandates DOL Disclosure on Lawsuit Aid, Aims to Bolster Private Pensions

The "Balance the Scales Act" proposes changes to how the Department of Labor (DOL) assists in certain legal actions and formally emphasizes the importance of private pension plans. Specifically, it amends the Employee Retirement Income Security Act of 1974 (ERISA), requiring the Secretary of Labor to enter into written agreements and notify employers or plan administrators before providing what the bill terms "adverse assistance" – essentially, advice or information given to an attorney for use in a civil lawsuit under ERISA section 502(a). The bill also mandates detailed annual reports to Congress on these activities and adds a policy statement to ERISA promoting voluntary private pension plans.

DOL Helping with Your Lawsuit? New Rules of Engagement Emerge

If you're an employee or retiree who believes your pension or benefit plan isn't being handled correctly, you might turn to the Department of Labor for help, and sometimes the DOL provides information to your attorney if a lawsuit is involved. This bill, under Section 2, changes that process. Before the DOL can provide this "adverse assistance" to an attorney for a civil action against an employer, plan sponsor, or fiduciary, the Secretary of Labor must now create a written agreement detailing the assistance. Crucially, a copy of this agreement must be given to the employer, plan sponsor, or fiduciary who might be on the receiving end of that legal action. This applies to any such assistance provided on or after the bill's enactment. For any ongoing assistance arrangements that exist when the bill passes, the DOL has 60 days to get these agreements and notifications in place.

Think of it this way: if the DOL is going to share information with your lawyer that could be used against your employer regarding your retirement plan, your employer will now get a heads-up about the DOL's involvement and the scope of that help, right from the start.

The Transparency Trade-Off: What Congress Will Know (And Who Else?)

This legislation doesn't just stop at notifying employers. Section 2 also requires the Secretary of Labor to submit an initial report to Congress within 60 days of enactment, followed by annual reports every December 31. These reports are meant to be pretty thorough. They must include:

• A copy of each "adverse assistance" agreement (with some personal identifying information redacted).
• The date of the agreement.
• A detailed description of the help provided, including what information was shared (its source, type, amount, and date), logs of phone calls or video chats (who talked, when, how, and what was said), and logs of meetings (who attended, when, how, the purpose, and what information was exchanged).
• An explanation from the Secretary on how each agreement supports the public policy of promoting voluntary employee benefit plans.

While this aims to increase transparency for Congress about how the DOL uses its resources to assist in ERISA litigation, it also means that details of the DOL's involvement with individuals' cases will be documented and reported. The bill specifies that reports identify parties to the agreement but not other individuals. The practical effect is that employers, plan sponsors, or fiduciaries, already notified under the new rules, will also know that this level of detail is being compiled and sent to Congress.

More Than Just Ink? ERISA Gets a Pro-Pension Policy Statement

Beyond the procedural changes, Section 3 of the bill amends Section 2 of ERISA – the part that lays out Congress's findings and policy goals for the Act. It adds a statement that Congress recognizes private pension plans significantly impact the retirement security of employees and their families. Furthermore, it declares it a policy of ERISA to "promote, encourage, and facilitate the voluntary establishment, maintenance, and contribution to these plans." While this doesn't create new direct requirements or benefits for individuals or employers, it officially emphasizes a policy direction that could influence future regulatory interpretations or legislative efforts concerning private pensions.

The Balancing Act: Who Gains, Who Might Lose Under These Changes?

So, what does this all mean for everyday people? If you're an employer or run a pension plan, these changes could be seen as a plus. You'll get a clear notification if the DOL is formally assisting in a potential lawsuit against you related to ERISA, giving you insight into the nature of that assistance. This is outlined in Section 2's requirement to provide a copy of the agreement.

However, if you're an employee or retiree seeking help from the DOL because you believe your ERISA rights have been violated, the new requirements might introduce complexities. The process of the DOL providing information to your attorney now involves formal agreements, notifications to the opposing party, and detailed logging for Congressional reports (all under Section 2). This could mean the process takes longer, or the DOL might become more selective or cautious in providing such "adverse assistance," potentially making it harder for some individuals to get the support they need for their claims. The bill aims for transparency and to balance the scales, but the real-world impact will depend on how these new procedures affect the DOL's ability and willingness to assist individuals in navigating complex ERISA disputes.