By Pension and Benefits Editorial Staff
The Pension Benefit Guaranty Corporation (PBGC) has issued final regulations that adjust the civil monetary penalties provided in ERISA Secs. 4071 and 4302 for inflation. The maximum daily penalty for failing to provide notices or other material information under ERISA Sec. 4071 has increased from $2,194 to $2,233, and the maximum penalty for failure to provide certain multiemployer plan notices under ERISA Sec. 4302 has risen from $292 to $297. The final regulations are effective January 15, 2020, and the increases apply to penalties assessed after January 15, 2020.
The PBGC is adjusting the penalties in accordance with the Federal Civil Penalties Inflation Adjustment Act Improvements Act of 2015 and the Office of Management and Budget Memorandum M-20-05. The Federal Civil Penalties Inflation Adjustment Act Improvements Act of 2015, which amends the Federal Civil Penalties Inflation Adjustment Act of 1990, requires agencies to adjust civil monetary penalties for inflation and publish the adjustments in the Federal Register by January 15 of each year after 2016. The adjustments must be based on changes in the Consumer Price Index (CPI-U).
The PBGC notes that, although the maximum penalties are increasing, it is uncommon for the PBGC to assess information penalties. The PBGC’s goal is to encourage compliance, not to penalize plans that inadvertently forget to file information. Generally, when the PBGC does assess an information penalty, the amount is significantly less than the maximum allowed.
Source: PBGC Website, January 15, 2020.
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