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ERISA Civil Penalties Inflation Adjustment Act Annual Adjustments for 2022

Posted by Paul D. Woodard | Feb 09, 2022 | 0 Comments

Contributing Author: Kristine Custodio Suero, Advanced Certified Paralegal

The Federal Civil Penalties Inflation Adjustment Act Improvements Act of 2015 was enacted to advance the effectiveness of civil money penalties and to strengthen their deterrent effect. Outdated penalties are a problem because civil penalties are less effective when they do not keep pace with the cost of living. The law requires agencies across the federal government to adjust their penalties for inflation not later than January 15 of every year. The Department of Labor's Civil Penalties Inflation Adjustment Act Annual Adjustment for 2022 final rule was published in the January 14, 2022 Federal Register. Below is a table that reflects the 2022 and 2021 civil money penalty amounts.

ERISA Penalty Statute

Description of ERISA Violations Subject to Penalty

2021 Penalty Amount

2022 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 $31 per employee

Up to $33 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 $2,259 per day

Up to $2,400 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 $1,788 per day

Up to $1,899 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 $1,644 per day

Up to $1,746 per day

ERISA

§ 502(c)(6)

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

Up to $161 per day not to exceed $1,613 per request

Up to $171 per day not to exceed $1,713 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 $143 per day

Up to $152 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 $1,419 per day

Up to $1,507 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 $120 per day

Up to $127 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 $120 per day

Up to $127 per day

ERISA

§ 502(c)(10)

Failure by any plan sponsor of group health plan, or any health insurance issuer offering health insurance coverage in connection with the plan, to meet the requirements of Sections 702(a)(1)(F), (b)(3), (c) or (d); or Section 701; or Section 702(b)(1) with respect to genetic information—daily per participant and beneficiary during non-compliance period.

Up to $120 per day during non- compliance period

Up to $127 per day during non- compliance period

ERISA

§ 502(c)(10)

Minimum penalty for de minimis failures to meet genetic information requirements not corrected prior to notice from Secretary of Labor.

$3,005   minimum

$3,192

minimum

ERISA

§ 502(c)(10)

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.

$18,035 minimum

$19,157 minimum

ERISA

§ 502(c)(10)

Cap on unintentional failures to meet genetic information requirements.

$601,152 maximum

$638,556 maximum

ERISA

§ 502(c)(12)

Per day for each failure of a CSEC plan in restoration status to adopt a restoration plan.

Up to $110 per day

Up to $117 per day

ERISA

§ 502(m)

Failure of fiduciary to

make a proper distribution from a defined benefit plan under § 206(e) of ERISA

Up to $17,416 per distribution

Up to $18,500 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 $1,190 per failure

Up to $1,264 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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