Contributing Author: Kristine M. Custodio, Advanced Certified Paralegal
In my previous blog post, I discussed potential Department of Labor (DOL) and Internal Revenue Service (IRS) penalties for anyone who willfully violates ERISA as well for various compliance issues in violation of the law. In this blog post, I will focus on the DOL's penalties as they relate to ERISA violations pursuant to the Federal Civil Penalties Inflation Adjustment Act Annual Adjustments for 2017, which became effective on January 13, 2017.
ERISA Penalty Statute |
Description of ERISA Violations Subject to Penalty |
2016 Penalty Amount |
2017 Penalty Amount |
|
ERISA § 209(b) |
Failure to furnish reports (e.g., pension benefit statements) to certain former participants and beneficiaries or maintain records. |
Up to $11 per employee |
Up to $28 per employee |
|
ERISA § 502(c)(2) |
• Failure or refusal to file annual report (Form 5500) required by ERISA § 104; and • Failure of a multiemployer plan to certify endangered or critical status under ERISA § 305(b)(3)(C) treated as failure to file annual report. |
Up to $2,063 per day |
Up to $2,097 per day |
|
ERISA § 502(c)(4) |
• Failure to notify participants under ERISA § 101(j) of certain benefit restrictions and/or limitations arising under Internal Revenue Code § 436; • Failure to furnish certain multiemployer plan financial and actuarial reports upon request under ERISA § 101(k); • Failure to furnish estimate of withdrawal liability upon request under ERISA § 101(1); and • Failure to furnish automatic contribution arrangement notice under ERISA § 514(e)(3). |
Up to $1,632 per day |
Up to $1,659 per day |
|
ERISA § 502(c)(5) |
Failure of a multiple employer welfare arrangement to file report required by regulations issued under ERISA § 101(g). |
Up to $1,502 per day |
Up to $1,527 per day |
|
ERISA § 502(c)(6) |
Failure to furnish information requested by Secretary of Labor under ERISA § 104(a)(6). |
Up to $147 per day not to exceed $1,472 per request |
Up to $149 per day not to exceed $1,496 per request |
|
ERISA § 502(c)(7) |
Failure to furnish a blackout notice under § 101(i) of ERISA or notice of the right to divest employer securities under § 101(m) of ERISA. |
Up to $131 per day |
Up to $133 per day |
|
ERISA § 502(c)(8) |
Failure by a plan sponsor of a multiemployer plan in endangered status to adopt a funding improvement plan or a multiemployer plan in critical status to adopt a rehabilitation plan. Penalty also applies to a plan sponsor of an endangered status plan (other than a seriously endangered plan) that fails to meet its benchmark by the end of the funding improvement period. |
Up to $1, 296 per day |
Up to $1,317 per day |
|
ERISA § 502(c)(9)(A) |
Failure by an employer to inform employees of CHIP coverage opportunities under ERISA § 701(f)(3)(B)(i)(I)- each employee a separate violation. |
Up to $110 per day |
Up to $112 per day |
|
ERISA § 502(c)(9)(B) |
Failure by a plan administrator to timely provide to any State the information required to be disclosed under ERISA § 701(f)(3)(B)(ii), regarding coverage coordination - each participant/beneficiary a separate violation. |
Up to $110 per day |
Up to $112 per day |
|
ERISA § 502(c)(10)(B)(i) |
Failure by any plan sponsor of a group health plan, or any health insurance issuer offering health insurance coverage in connection with the plan, to meet the requirements of ERISA § 702(a)(1)(F), (b)(3), (c), or (d); or § 701; or § 702(b)(1) with respect to genetic information. |
$110 per day during non- compliance period |
$112 per day during non- compliance period |
|
ERISA § 502(c)(10)(C)(i) |
Minimum penalty for de minimis failures to meet genetic information requirements not corrected prior to notice from Secretary of Labor. |
$2,745 minimum |
$2,790 minimum |
|
ERISA § 502(c)(10)(C)(ii) |
Minimum penalty for failures to meet genetic information requirements which are not corrected prior to notice from Secretary of Labor and are not de minimis. |
$16,473 minimum |
$16,742 minimum |
|
ERISA § 502(c)(10)(D)(iii)(II) |
Cap on unintentional failures to meet genetic information requirements. |
$549,095 maximum |
$558,078 maximum |
|
ERISA § 502(c)(12) |
Failure of CSEC plan sponsor to establish or update a funding restoration plan. |
Up to $100 per day |
Up to $102 per day |
|
ERISA § 502(m) |
Distribution prohibited by ERISA § 206(e). |
Up to $15,909 per distribution |
Up to $16,169 per distribution |
|
ERISA § 715 |
Failure to provide Summary of Benefits Coverage under Public Health Services Act § 2715(f), as incorporated into ERISA § 715 and 29 CFR 2590.715-2715(e). |
Up to $1,087 per failure |
Up to $1,105 per failure |
If you have questions about plan compliance issues, IRS or DOL audits, contact the attorneys at Butterfield Schechter LLP for more information. Our attorneys have an extensive history of counseling plans through an IRS or DOL audit.
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