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Compliance May 12, 2016
Penalties for Failure to Provide Notices for DB Plans Increasing
The PBGC has issued an interim final rule adjusting notice failure penalties.
Reported by Rebecca Moore
The Pension Benefit Guaranty Corporation (PBGC) is amending its regulations to adjust the penalties provided for in sections 4071 and 4302 of the Employee Retirement Income Security Act (ERISA).
The regulations being amended are those for Penalties for Failure to Provide Certain Notices or Other Material Information (29 CFR part 4071) and Penalties for Failure to Provide Certain Multiemployer Plan Notices (29 CFR part 4302). Conforming amendments are also being made to the regulations on Annual Financial and Actuarial Information Reporting (29 CFR part 4010) and Termination of Single-Employer Plans (29 CFR part 4041).
PBGC says its legal authority for this action comes from the Federal Civil Penalties Inflation Adjustment Act of 1990 as amended by the Federal Civil Penalties Inflation Adjustment Act Improvements Act of 2015 and from sections 4002(b)(3), 4071, and 4302 of ERISA.
The new maximum amounts are $2,063 for section 4071 penalties and $275 for section 4302 penalties. The amendments are effective August 1, 2016.
Text of the PBGC’s Interim Final Rule is here.