DOL and PBGC Announce Increased 2021 Retirement Plan Penalties

Under the Federal Civil Penalties Inflation Adjustment Act of 2015, the Department of Labor (DOL) and the Pension Benefit Guaranty Corporation (PBGC) are required to make annual inflation adjustments to ERISA violation penalties by January 15 of each year. The recently released retirement plan penalties for 2021 are as follows:

DOL Penalties

The increased penalties apply to violations where a penalty is assessed after January 15, 2021 for violations occurring after November 2, 2015.

Violation 2020 Penalty  2021 Penalty 
Failure or refusal to properly file an annual report (Form 5500) required by Section 104 Up to $2,233 per day Up to $2,259 per day
Failure to notify participants under Section 10(j) of certain benefit restrictions or limitations arising under Section 436 of the Internal Revenue Code

Failure to furnish an estimate of withdrawal liability on request under Section 101(l)

Failure to furnish an automatic contribution arrangement notice under Section 514(e)(3)

Up to $1,767 per day per affected participant Up to $1,788 per day per affected participant
Failure of a defined contribution plan to furnish a blackout notice under Section 101(i) or a notice of the right to divest employer securities under Section 101(m) Up to $141 per day per affected participant Up to $143 per day per affected participant
Defined benefit distribution prohibited by Section 206(e) due to an impermissible forfeiture following withdrawal of a participant’s contributions Amount distributed but no more than $17,213 per distribution Amount distributed but no more than $17,416 per distribution
Failure to furnish reports (e.g., pension benefit statements) to certain former participants and beneficiaries or maintain records $31 per affected participant and beneficiary $31 per affected participant and beneficiary
Failure of Cooperative and Small Employer Charity Act plan sponsor to establish or update a funding restoration plan Up to $109 per day Up to $109 per day
Failure to furnish information requested by the Secretary of Labor under Section 104(a)(6) Up to $159 per day, not to exceed $1,594 per request Up to $161 per day, not to exceed $1,613 per request


PBGC Penalties

For overdue filings, notices, or other information required from single-employer defined-benefit plans, the PBGC has set a maximum penalty of $2,259/day for 2021, up from $2,233 in 2020. 

HBL has experience in all areas of benefits and employment law, offering a comprehensive solution to all your business benefits and HR/employment needs. We help ensure you are in compliance with the complex requirements of ERISA and the IRS code, as well as those laws that impact you and your employees. Together, we reduce your exposure to potential legal or financial penalties. Learn more by calling 678-439-6236.

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Hall Benefits Law, LLC

HBL offers employers comprehensive legal guidance on benefits in mergers and acquisitions, Employee Stock Ownership Plans (ESOPs), executive compensation, health and welfare benefits, healthcare reform, and retirement plans. We counsel a wide spectrum of clients including small, mid-sized, and large companies, 401(k) investment advisors, health insurance brokers, accountants, attorneys, and HR consultants, just to name a few. HBL is passionate about advising clients, and we are dedicated to our mission: to provide comprehensive, personalized, and practical ERISA and benefits legal solutions that exceed client expectations.
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