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ERISA Civil Penalties Inflation Adjustment Act Annual Adjustments for 2020

Posted by Paul D. Woodard | Sep 28, 2020 | 0 Comments

Contributing Author: Kristine Custodio Suero, Advanced Certified Paralegal

In my past 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, and I also provided the DOL's penalties as they relate to ERISA violations pursuant to the Federal Civil Penalties Inflation Adjustment Act Annual Adjustments. Following are the updates for 2020, which became effective on January 15, 2020.

ERISA Penalty Statute

Description of ERISA Violations Subject to Penalty

2017 Penalty Amount

2020 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 $28 per employee

Up to $31 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 $2,097 per day

Up to $2,233 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 $1,659 per day

Up to $1,767 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 $1,527 per day

Up to $1,625 per day

ERISA

§ 502(c)(6)

Failure to furnish information requested by Secretary of Labor under ERISA § 104(a)(6).

Up to $149 per day not to exceed $1,496 per request

Up to $159 per day not to exceed $1,594 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 $133 per day

Up to $141 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 $1,317 per day

Up to $1,402 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 $112 per day

Up to $119 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 $112 per day

Up to $119 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.

$112 per day during non- compliance period

$119 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.

$2,790 minimum

$2,970 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.

$16,742 minimum

$17,824 minimum

ERISA

§ 502(c)(10)(D)(iii)(II)

Cap on unintentional failures to meet genetic information requirements.

$558,078 maximum

$594,129 maximum

ERISA

§ 502(c)(12)

Failure of CSEC plan sponsor to establish or update a funding restoration plan.

Up to $102 per day

Up to $109 per day

ERISA

§ 502(m)

Distribution prohibited by ERISA § 20a6(e).

Up to $16,169 per distribution

Up to $17,213 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 $1,105 per failure

Up to $1,176 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.

About the Author

Paul D. Woodard

Paul Woodard practices in the areas of Employee Benefits, Employee Stock Ownership Plans, Pension and Profit Sharing Plans, ERISA, ERISA Litigation, Business Law, Qualified Domestic Relations Orders (QDROs), and Estate Planning.

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