The Department of Labor (DOL) and Pension Benefit Guaranty Corp. (PBGC) have published their 2019 inflation-adjusted civil monetary penalties for retirement plans. The agencies must adjust these fines for inflation each year 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 2019 and 2018. The increased amounts apply for penalties assessed after Jan. 23, 2019, for violations occurring after Nov. 2, 2015.
PBGC’s 2019 maximum penalty under ERISA Section 4071 for single-employer DB plans is $2,194 a day (up from $2,140 in 2018) for each day a filing, notice, or other information is overdue. The higher rate applies to penalties assessed after Dec. 28, 2018.
The $2,194 per day maximum penalty potentially could apply to virtually any late PBGC information or premium filing for a single-employer plan, including:
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: