Penalty Increases for Benefit-Related Violations

Recently, The Department of Labor published an interim final rule to adjust for inflation within the civil monetary penalties enforced by the Department of Labor. This Benefits Bulletin describes some of the adjustments made to the benefit-related civil monetary penalties enforced by the Employee Benefits Security Administration (EBSA) under the Employee Retirement Income Security Act of 1974 (ERISA). As penalties have not kept up with the rate of inflation, Congress enacted legislation requiring an initial “catch-up” adjustment to specified penalties, followed by annual adjustments.

The rule’s catch-up adjustments apply to penalties assessed after August 1, 2016, whose associated violations occurred after November 2, 2015. Beginning in 2017, the Department of Labor will adjust the new ERISA Title I penalty amounts annually for inflation by January 15. For example, by January 15, 2017, the Department will adjust annual penalty amounts to reflect any increase in inflation from October 2015.

A full list of penalty changes can be found on the links shown at the bottom of this Bulletin, but some examples include:

Form 5500: The maximum penalty for failing to file Form 5500 (due the last day of the seventh month after the plan year ends) will increase from $1,100 to $2,063 per day that the Form 5500 is late.

Group Health Plans: Failure to provide the Summary of Benefits and Coverage (SBC) will increase from $1,000 to $1,087 per failure. Maximum penalties relating to disclosures regarding the availability of Medicaid or CHIP assistance, including failure to disclose to a state, on request, and relevant information about the employer’s plan, will increase from $100 to $110 per day.

401(k) Plans: For plans with automatic contribution arrangements, penalties for failure to provide the required ERISA pre-emption notice to participants will increase from $1,000 to $1,632 per day. Failure to furnish reports, such as pension benefits statements to certain former participants and beneficiaries or failure to maintain records, will increase from $11 to $28 per employee.

On a related note, The Department of Labor released a proposal to improve and modernize Form 5500, where revisions, if approved, will begin with the Plan Year 2019 that will be filed in 2020 (

More information can be found at: