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DOL Increases Penalties for Employee Benefit Plan Violations

The Department of Labor announced on June 30, 2016, that it will be increasing the penalties for various employee benefit plan violations under ERISA, effective August 1, 2016 (for violations occurring after November 2, 2015).

A complete list of the new penalty amounts can be found here, but below are highlights of the changes.

  • The maximum penalty for a failure to file Form 5500 will increase from $1,100 to $2,063 per day
  • The maximum penalty for a failure to provide a Summary of Benefits Coverage as required under health care reform will increase from $1,000 to $1,087 per failure
  • The maximum penalty for a failure to provide a 401(k) plan automatic contribution arrangement notice under ERISA § 514(e) will increase from $1,000 per day to $1,632 per day
  • The maximum penalty for a failure to furnish a 401(k) plan blackout notice will increase from $100 per day to $131 per day
  • The maximum penalty for a failure to comply with certain ERISA recordkeeping and reporting requirements will increase from $11 per employee to $28 per employee
  • The maximum penalty for a failure to file certain reports for multiple employer welfare arrangements as required by ERISA § 101(g) will increase from $1,100 to $1,502

Significant changes also include increases to penalties relating to group health plan failures to meet genetic information requirements. For example, the cap on unintentional failures will increase from $500,000 to $549,000.

Beginning in January 2017, the DOL will make annual inflation adjustments to ERISA penalty amounts.

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