On Jan. 15, 2019, the DOL published a pre-publication version of the final rule adjusting for inflation of civil monetary penalties under ERISA. (They were unable to publish an official version due to the lapse in funding for certain government agencies.) The pre-published version of the final rule is for informational purposes only until the official rule is published in the Federal Register. Thus, until the official version is published in the Federal Register, the effective date of the 2019 final rule is delayed.
As background, federal law requires agencies to adjust their civil monetary penalties for inflation on an annual basis. The DOL last adjusted certain penalties under ERISA in January 2018 (as discussed in the Jan. 9, 2018, article here).
Among other changes, the EBSA is increasing the following penalties that may be levied against sponsors of ERISA-covered plans:
•The penalty for a failure to file Form 5500 will increase from a maximum of $2,140 per day to a maximum of $2,194 per day.
•The penalty for a failure to furnish information requested by the DOL will increase from a maximum of $152 per day to a maximum of $156 per day.
•The penalty for a failure to provide CHIP notices will increase from a maximum of $114 per day to a maximum of $117 per day.
•The penalty for a failure to comply with GINA will increase from $114 per day to $117 per day.
•The penalty for a failure to furnish SBCs will increase from a maximum of $1,128 per failure to a maximum of $1,156 per failure.
•The penalty for a failure to file Form M-1 (for MEWAs) will increase from $1,558 to $1,597.
•The regulations also increased penalties resulting from other reporting and disclosure failures.
These new amounts will go into effect following official publication in the Federal Register. Until then, employers should familiarize themselves with these unofficial penalty amounts for 2019.
For more information on the new penalties, including the complete listing of changed penalties, please review the pre-publication version of the final rule below. Additionally, consult with your advisor if you have questions about the imposition of these penalties.
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