Civil monetary penalties won’t increase for 2026
A recent memo from the US Office of Management and Budget (OMB) directs federal agencies not to increase inflation-adjusted civil monetary penalties for employee benefit plans for 2026. Ordinarily, the Federal Civil Penalties Inflation Adjustment Act Improvements Act of 2015 (the Act) requires federal agencies to adjust their civil penalties for inflation by January 15 of each year.
Under the Act, the 2026 penalties are supposed to be calculated by multiplying the 2025 penalty amounts by the percentage increase in the Consumer Price Index for all Urban Consumers (CPI-U) between October 2024 and October 2025. However, due to the 43-day government shutdown that began October 1, 2025, the Bureau of Labor Statistics never released CPI-U figures for October 2025, leaving the agencies without a multiplier to apply to their 2025 penalties.
The OMB memo explains that no explicit statutory authority exists to use an alternative method of calculation. Further, OMB explains that an effort to use an alternative method, without that authority, could subject penalty calculations to “significant and disruptive litigation risks.” Accordingly, the memo directs the agencies to continue using 2025 penalties (shown below) for 2026.
The agencies may be in a similar situation next year, as the Act requires that 2027 penalties reflect the increase in CPI-U between October 2025 (which does not exist) and October 2026.
DOL penalties
| Type of failure | 2025 and 2026 | |
|---|---|---|
| Failure to file Form 5500 | $2,739/day late | |
| Failure to provide plan documents to DOL within 30 days after request | $195/day late, capped at $1,956/request |
|
| Failure to notify defined benefit (DB) plan participants about funding-based restrictions on benefit accruals, lump sums, and other accelerated payment forms or unpredictable contingent-event benefits | $2,167/day late per participant |
|
| Failure to notify defined contribution (DC) plan participants about automatic contribution arrangements | $2,167/day late per participant |
|
| Failure to notify DC plan participants about blackout period | $173/day late per participant |
|
| Failure to notify DC plan participants about right to divest employer stock | $173/day late per participant |
|
| Failure to notify separated participants about deferred vested benefits | $38/participant | |
| Failure to maintain sufficient plan administration records | $38/participant | |
| Failure of DB plan with liquidity shortfall to limit distributions to monthly single-life annuity amount plus any Social Security supplement | $21,114/distribution | |
| Failure of cooperative and small-employer charity plan to establish or update funding restoration plan | $133/day late | |
| Failure to file a multiple employer welfare arrangement (MEWA) annual report (Form M-1) | $1,992/day late | |
| Failure to inform an employee about Children’s Health Insurance Program (CHIP) coverage opportunities (each employee constitutes a separate violation) | $145/day late | |
| Failure to timely provide to any state information about coverage coordination with Medicaid or CHIP (each participant or beneficiary constitutes a separate violation) | $145/day late | |
| Failure to meet genetic information restrictions (on discriminating in eligibility, coverage, or premiums; requesting or requiring genetic tests; collecting genetic information; etc.) | $145/day of noncompliance | |
|
$3,642 | |
|
$21,864 | |
|
$728,764 | |
| Failure to provide summary of benefits and coverage (SBC) with uniform glossary | $1,443/failure |
PBGC penalties
PBGC announced on May 12 that its civil penalties for 2026 would remain at the 2025 levels. PBGC’s 2025 maximum penalty under ERISA Section 4071 for single-employer DB plans is $2,739 a day for each day a filing, notice, or other information is overdue. The penalty amount applies to penalties assessed after January 8, 2025. This penalty could apply to almost any late PBGC information or premium filing for a single-employer plan, including:
- Premium filings (the late-filing penalty is separate from the penalty on premium underpayments)
- ERISA Section 4010 controlled-group financial and plan actuarial information filings
- Form 10 or 10-Advance reportable-event filings
- Form 200 filings to report missed contributions in excess of $1 million
- ERISA Section 4062(e) notices (when permanent cessation of operations at a facility results in a workforce reduction affecting more than 15% of all employees eligible to participate in any qualified retirement plan in the controlled group)
- ERISA Section 4063 notices (when a substantial employer has withdrawn from a multiple-employer plan)
Maximum penalty rarely assessed. In practice, PBGC rarely assesses the maximum penalty. The agency's current penalty policy calls for much smaller penalties, especially when a delinquent filing is made soon after the due date or the plan is small. However, depending on the facts and circumstances, PBGC might assess the maximum penalty in two situations:
- A sponsor fails to file Form 200 reporting a missed contribution that brings the total unpaid amount (including interest) to more than $1 million — or files the form more than 10 days after the missed contribution's due date — if PBGC would have perfected a lien had the agency known about the missed contribution. (If the sponsor promptly deposits the missed contribution, the agency typically won't perfect the lien.)
- A nonpublicly traded employer with large unfunded vested benefits (for variable-rate PBGC premiums) fails to provide advance notice of a reportable event under ERISA Section 4043(b).
Related resources
Non-Mercer resources
- No adjustment of civil penalties for inflation, PBGC (Federal Register, May 12, 2026)
- Memorandum to the Heads of Executive Departments and Agencies, M-26-11 (Office of Management and Budget, April 17, 2026)
- 2025 federal government shutdown impact on the Consumer Price Index (Bureau of Labor Statistics)
- DOL adjustment of civil penalties for 2025 (Federal Register, January 10, 2025)
- PBGC adjustment of civil penalties for 2025 (Federal Register, January 8, 2025)
- PBGC assessment of penalties for failure to provide required information (Federal Register, July 18, 1995)
Mercer Law & Policy resources
- HHS adjusts 2026 HIPAA, certain ACA and MSP monetary penalties (January 29, 2026)
- 2026 compliance calendar for single-employer defined benefit plans (November 20, 2025)
- 2026 compliance calendar for single-employer defined contribution plans (November 20, 2025)
- DOL, PBGC announce retirement plan civil penalties for 2025 (January 10, 2025)
- DOL sets 2025 penalties for health and welfare benefit plan violations (January 10, 2025)