With reports that probationary employees at the Department of Labor’s Employee Benefits Security Administration were laid off last week and with potentially more cuts to come, the already understaffed agency may be challenged to enforce existing regulations, finalize guidance regarding the SECURE Act 2.0 of 2022 and aid plan sponsors and retirement service providers.

The exact number of probationary employees terminated from their roles at EBSA is unknown. Hillary Abel, who was appointed as the head of the Division of Employee Ownership in July 2024, was terminated as part of the administration of President Donald Trump’s efforts to drastically downsize the federal government.

It is also unclear whether the DOL’s ERISA Advisory Council has been affected by President Donald Trump’s recent executive order to eliminate federal advisory committees. The President ordered on February 19 that within 30 days a list of “additional unnecessary government entities and advisory committees” be submitted to the President for termination.

Lisa Gomez, the most recent EBSA head and former assistant secretary of labor, previously expressed concerns about EBSA’s limited budget and staff. In September 2024, Gomez and Timothy Hauser, deputy assistant secretary for program operations, said EBSA had a staff of 850 people, which they argued was inadequate for an agency required to look out for the interests of 150 million people participating in retirement plans, health plans and disability plans.

At the time, Gomez said if EBSA did not receive supplemental funding from the federal government, it would have to reduce its staff by 120 full-time employees across its three regional offices.

Gomez, who spoke recently with PLANSPONSOR, says when she was EBSA head, she would often call it a “scrappy agency,” as it always needed to be creative about how it used its limited funds. She argues that EBSA is not an agency with room to cut staff or funding.

She says recent staff cuts will likely cause issues for the Ask EBSA Hotline, a toll-free number plan sponsors, recordkeepers and other providers can use to ask questions of benefits advisers. Gomez says when she was in office, there were only about 100 benefits advisers nationwide. In the 2024 fiscal year, Gomez says these advisers helped recover $544 million for plans and participants from informal complaint resolutions.

“[Reduced staff] is going to result in longer wait times for people calling, longer queues for people to wait in line for an actual person to get on the phone [and] longer times to respond,” Gomez says.

At the beginning of the year, EBSA announced amendments to the Voluntary Fiduciary Correction Program, providing employers and plan administrators with more efficient ways to voluntarily correct compliance issues in retirement, health and other employee benefit plans. But Gomez says there need to be staff members at EBSA to help process these corrections, and she says these staff members are already under a lot of constraints.

“This is a program that EBSA does not have to offer … but it’s helpful,” Gomez says. “It’s going to be something where there’s more delays for people, and plans are already complaining that it takes too long to get things done.”

Gomez adds that the agency also had a project in place to review and improve Form 5500s, but it had to be put on hold due to the lack of resources and time.

While the agency was able to launch the Retirement Savings Lost and Found database just before the change in administration, Gomez says it was unable to finalize automatic portability regulations that many in the industry are anticipating. Ultimately, she says it is up to the Trump administration to decide if it wants to go forward with these projects and evaluate if staff members can devote time to them.

EBSA is also involved in investigating plans, and Gomez says during her tenure, the agency received inquiries from Congress asking why the investigations were taking so long. At the time, she says, only a portion of its staff were handling these investigations, and there was about one investor for every 13,000 plans that EBSA regulated. She says this backlog of investigations will likely continue amid more staff cuts.

In addition, more mandatory deadlines from the SECURE 2.0 continue to come up each year, and Gomez says additional guidance on the various provisions may be delayed by the lack of staff and resources.

It is possible also EBSA’s budget will be cut further, as there have been proposals from Republicans to reduce both EBSA and the DOL’s budgets. Congress faces a March 14 deadline to extend funding for the federal government in the current fiscal year to avoid a shutdown. In addition, the House Budget Resolution, passed along party lines this week, calls for some $2 trillion in federal spending cuts, in part to offset the cost of $4.5 trillion in planned tax cuts.