Remember the 2022 Civil Monetary Penalties

Keep in mind that the Department of Labor (DOL) adjusted the civil monetary penalties for inflation for 2022.

The DOL adjusts the penalties for various violations of Title 1 of ERISA in accordance with the 2015 Inflation Adjustment Act, which provides a formula on how to determine the proper adjustment for each penalty, starting from a baseline of each penalty’s last increase other than under a prior version of the Inflation Adjustment Act. These include penalties for fiduciary, reporting and disclosure violations. The law requires federal agencies to adjust their civil monetary penalties for inflation no later than Jan. 15 of each year. 

Penalty Increases

The penalty adjustments for penalties assessed after Jan. 15, 2022 include the following.

ERISA Section 209(b)

Violation: Failure to furnish reports, such as pension benefit statements, to certain former participants and beneficiaries or maintain records

Penalty: increases from the 2021 level of up to $31 per employee to up to $33 per employee

ERISA Section 502(c)(2) 

Violations:

• failure or refusal to file the Form 5500; and
• failure of a multiemployer plan to certify endangered or critical status under ERISA Section 305(b)(3)(c) treated as failure to file annual report.
   

Penalty: Increases from the 2021 level of up to $2,259 per day to up to $2,400 per day.

ERISA Section 502(c)(4) 

Violations: Failure to:

• notify participants of certain benefit restrictions and/or limitations arising under Code Section 436;
• furnish certain multiemployer plan financial and actuarial reports upon request;
• furnish estimates of withdrawal liability up request; and
• furnish automatic contribution arrangement notices.

Penalty: Increases from the 2021 level of up to $1,788 per day to $1,899 per day.

ERISA Section 502(c)(8) 

Violations: Failure by:

• a plan sponsor of a multiemployer plan in endangered status to adopt a funding improvement plan;
• a plan sponsor of a multiemployer plan in critical status to adopt a rehabilitation plan; and
• a plan sponsor of an endangered plan (but not a seriously endangered plan) to meet its benchmark by the end of a funding improvement period.

Penalty: Increases from the 2021 level of up to $1,419 per day to up to $1,507 per day.

A table of the current penalty amounts enforceable by the Employee Benefit Security Administration (EBSA) and the inflation-adjusted penalty that went into effect for penalties assessed after Jan. 15, 2022 is available here.