March 16, 2017
DOL Increases Civil Penalties for Inflation
The Department of Labor (DOL) issued a final rule increasing civil penalties under all the laws it enforces, including the Employee Retirement Income Security Act (ERISA). The increases are pursuant to the Federal Civil Monetary Penalties Inflation Adjustment Act Improvements Act of 2015 (Inflation Act). The Inflation Act requires federal agencies to make an annual inflation-based adjustment to their civil monetary penalties.
The increases in the final rule, which are based on inflation from October 15, 2015 to October 15, 2016, apply to penalties assessed after January 13, 2017, with respect to violations that occurred after November 2, 2015.
The first chart below lists penalties for both pension and health plans that violate ERISA. The second chart reports penalties for pension plans. The third chart reports penalties for health plans. Because of prior inflation adjustments to some penalties and differing rounding rules, the adjustment percentage varies by penalty.
| Penalties Related to Both Pension and Health Plans | |||
|---|---|---|---|
| ERISA Penalty Section | ERISA Violation | 2016 Penalty | 2017 Penalty |
| ERISA §502(c)(2) | Failure or refusal to file annual report (Form 5500) under §104 | Up to $2,063 per day | Up to $2,097 per day |
| ERISA §502(c)(6) | Failure to furnish information (documents related to plan) requested by Secretary under §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 |
| Penalties Related Exclusively to Pension Plans | |||
|---|---|---|---|
| ERISA Penalty Section | ERISA Violation | 2016 Penalty | 2017 Penalty |
| ERISA §209(b) | Failure to furnish reports (e.g., benefit statements) to certain former participants and beneficiaries; failure to maintain records | Up to $28 per participant | Up to $28 per participant |
| ERISA §502(c)(4) | Failure to furnish certain multiemployer financial and actuarial reports upon request under §101(k); failure to furnish estimate of withdrawal liability upon request under §101(l); failure to furnish automatic contribution arrangement notice under §514(e)(3) | Up to $1,632 per day | Up to $1,659 per day |
| ERISA §502(c)(7) | Failure to furnish blackout notice under §101(i); failure to furnish notice of right to diversify under §101(m) (for “applicable individual account plans”) | Up to $131 per day | Up to $133 per day |
| Penalties Related Exclusively to Pension Plans | |||
|---|---|---|---|
| ERISA Penalty Section | ERISA Violation | 2016 Penalty | 2017 Penalty |
| ERISA §209(b) | Failure to furnish reports (e.g., benefit statements) to certain former participants and beneficiaries; failure to maintain records | Up to $28 per employee | Up to $28 per employee |
| ERISA §502(c)(4) | Failure to notify participants of certain benefit restrictions under §101(j); failure to furnish automatic contribution arrangement notice under §514(e)(3) | Up to $1,632 per day | Up to $1,659 per day |
| ERISA §502(c)(7) | Failure to furnish blackout notice under §101(i); failure to furnish notice of right to diversify under §101(m) (for “applicable individual account plans”) | Up to $131 per day | Up to $133 per day |
| ERISA §502(m) | Distribution of amount prohibited under §206(e) because of liquidity shortfall | Up to $15,909 per distribution | Up to $16,169 per distribution |
| Penalties Related Exclusively to Health Plans | |||
|---|---|---|---|
| ERISA Penalty Section | ERISA Violation | 2016 Penalty | 2017 Penalty |
| ERISA §715 | Failure to provide Summary of Benefits and Coverage (SBC) | Up to $1,087 per failure | Up to $1,105 per failure |
| ERISA §502(c)(9)(A) | Failure to inform employees of CHIP coverage opportunities | Up to $110 per day | Up to $112 per day |
| ERISA §502(c)(9)(B) | Failure to timely provide to requesting state information relevant to coordinating group coverage with Medicaid or CHIP | Up to $110 per day | Up to $112 per day |
| ERISA §502(c)(10)(B)(i) | Failure to comply with genetic information requirements | $110 per day during non-compliance period | $112 per day during non-compliance period |
| ERISA §502(c)(10)(C)(i) | Minimum penalty for failure to meet genetic information requirements where violations are de minimis and not corrected prior to notice from Secretary | $2,745 minimum | $2,790 minimum |
| ERISA §502(c)(10)(C)(ii) | Minimum penalty for failure to meet genetic information requirements where violations are not de minimis and not corrected prior to notice from Secretary | $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 |
Share this page
Contact an Expert
A Member of The Segal Group
Copyright © 2002 – by The Segal Group, Inc. All rights reserved.