PBGC Adjusts Penalties for Failure to Provide Information
The agency is required to adjust these amounts annually for inflation, but the agency says its goal is to encourage compliance, not to penalize plans that inadvertently forget to file information.
The Pension Benefit Guaranty Corporation (PBGC) is required to amend its regulations annually to adjust for inflation the maximum civil penalty for failure to provide certain notices or other material information and for failure to provide certain multiemployer plan notices.
As such, the agency has issued a final rule adjusting the maximum civil penalties that PBGC may assess under sections 4071 and 4302 of the Employee Retirement Income Security Act (ERISA). Section 4302, added to ERISA by the Multiemployer Pension Plan Amendments Act of 1980, authorizes PBGC to assess a civil penalty of up to $100 a day for failure to provide a notice under subtitle E of title IV of ERISA (dealing with multiemployer plans). Section 4071, added to ERISA by the Omnibus Budget Reconciliation Act of 1987, authorizes PBGC to assess a civil penalty of up to $1,000 a day for failure to provide a notice or other material information under subtitles A, B, and C of title IV and sections 303(k)(4) and 306(g)(4) of title I of ERISA.
The new maximum amounts are $2,140 for section 4071 penalties and $285 for section 4302 penalties. These are up from $2,097 and $279 in 2017, respectively. The adjusted amounts are effective January 12, 2018.
Text of the final rule is here. Important to note, the agency says it is uncommon for it to assess information penalties. The agency’s goal is to encourage compliance, not to penalize plans that inadvertently forget to file information. In most cases, when PBGC does assess an information penalty, it is for an amount significantly less than the maximum permitted. Find out more by signing up for the PBGC’s What’s New emails for practitioners.
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