The Department of Labor (DOL) and Pension Benefit Guaranty Corp. (PBGC) have published their 2021 inflation-adjusted civil monetary penalties for retirement plans. The agencies must annually adjust these fines for inflation under the Federal Civil Penalties Inflation Adjustment Act Improvements Act of 2015.
The chart below shows DOL’s maximum penalties relevant to single-employer defined benefit (DB) and defined contribution (DC) plans for 2021 and 2020. The increases apply to penalties assessed after Jan. 15, 2021, for violations occurring after Nov. 2, 2015.
PBGC’s 2021 maximum penalty under ERISA Section 4071 for single-employer DB plans is $2,259 a day (up from $2,233 in 2020) for each day a filing, notice or other information is overdue. The higher rate applies to penalties assessed after Jan. 13.
The $2,259 per day maximum penalty potentially could apply to virtually any late PBGC information or premium filing for a single-employer plan, including:
In practice, PBGC rarely assesses the maximum penalty. The agency’s current penalty policy calls for mush 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:
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