Employee Benefits News examines legal developments that impact the employee benefits and executive compensation employers provide, including federal and state legislation, rules from federal...
May 12 — Pension plan sponsors will be paying a lot more in PBGC penalties when they don't provide certain required notices or other material information.
In an interim final rule issued May 12, the Pension Benefit Guaranty Corporation announced higher civil penalties for the failure to provide notices consistent with the agency's annual financial and actuarial information reporting requirements under Employee Retirement Income Security Act Section 4071.
The rule will also raise penalties for the failure to provide certain multiemployer plan notices under ERISA Section 4302.
Under the rule, the new maximum amount for noncompliance with the Section 4071 requirements will nearly double, from the current $1,100-per-day penalty to $2,063. The penalty under ERISA Section 4302 will increase from $110 per day to a $275 daily assessment.
The rule (RIN:1212-AB33), which is slated to appear in the Federal Register on May 13, will take effect Aug. 1.
Will Hansen, the ERISA Industry Committee's senior vice president of retirement policy, told Bloomberg BNA on May 12 that while his organization “recognizes the need for the PBGC to consider inflation adjustments,” ERIC “encourages the agency to focus on taking action to help plan sponsors by reducing burdensome reporting and other requirements that increase the costs of offering pension benefits.”
A PBGC official who spoke on the condition of anonymity told Bloomberg BNA on May 12 that these penalties are rarely assessed.
The PBGC said in the rule that it was required to raise these penalties by the Federal Civil Penalties Inflation Adjustment Act Improvements Act of 2015 and Office of Management and Budget Memorandum M-16-06.
To contact the reporter on this story: David B. Brandolph in Washington at email@example.com
To contact the editor responsible for this story: Jo-el J. Meyer at firstname.lastname@example.org
Text of the interim final rule is at http://src.bna.com/eU2.
All Bloomberg BNA treatises are available on standing order, which ensures you will always receive the most current edition of the book or supplement of the title you have ordered from Bloomberg BNA’s book division. As soon as a new supplement or edition is published (usually annually) for a title you’ve previously purchased and requested to be placed on standing order, we’ll ship it to you to review for 30 days without any obligation. During this period, you can either (a) honor the invoice and receive a 5% discount (in addition to any other discounts you may qualify for) off the then-current price of the update, plus shipping and handling or (b) return the book(s), in which case, your invoice will be cancelled upon receipt of the book(s). Call us for a prepaid UPS label for your return. It’s as simple and easy as that. Most importantly, standing orders mean you will never have to worry about the timeliness of the information you’re relying on. And, you may discontinue standing orders at any time by contacting us at 1.800.960.1220 or by sending an email to email@example.com.
Put me on standing order at a 5% discount off list price of all future updates, in addition to any other discounts I may quality for. (Returnable within 30 days.)
Notify me when updates are available (No standing order will be created).
This Bloomberg BNA report is available on standing order, which ensures you will all receive the latest edition. This report is updated annually and we will send you the latest edition once it has been published. By signing up for standing order you will never have to worry about the timeliness of the information you need. And, you may discontinue standing orders at any time by contacting us at 1.800.372.1033, option 5, or by sending us an email to firstname.lastname@example.org.
Put me on standing order
Notify me when new releases are available (no standing order will be created)