Department of Labor Announces Increases to ERISA Noncompliance Penalties
On June 30, 2016, the Department of Labor (the “Department”) announced that various civil monetary penalties, including those pertaining to ERISA reporting and disclosure violations, will be increased to account for inflation. The increases are prompted by the Federal Civil Monetary Penalties Inflation Adjustment Act of 1990 (the “Inflation Adjustment Act”). This law requires federal agencies, including the Department, to adjust their civil monetary penalties for inflation. Additionally, 2015 amendments to the Inflation Adjustment Act require federal agencies to adjust their civil monetary penalties for inflation through October of 2015. After this initial “catch-up” adjustment, the agencies must adjust their civil monetary penalties annually. Beginning in 2017, the Department will adjust the new penalty amounts annually for inflation no later than January 15 of each year. For example, by January 15, 2017, the Department will adjust penalty amounts to reflect any increase in inflation from October 2015 to October 2016. The table below shows, for key ERISA violations, the current penalty amounts, and the 2016 inflation-adjusted penalty. The catch-up adjustments apply to penalties assessed after August 1, 2016.
For further information or questions regarding the inflation-adjusted ERISA penalties, please contact the Schwabe attorney with whom you work or Wally Miller.
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