The US Department of Labor Raises Penalties for ERISA Violations
Industry UpdateFebruary 12, 2024Federal Legislative UpdatePrint this Article
The Department of Labor (DOL) has increased civil penalties for violations of the Employee Retirement Income Security Act (ERISA). Employers need to be aware of how these penalties could affect their organizations; if they are found in violation of ERISA rules, they may now face higher fines that can impact their finances and reputation.
These increased penalties apply to any penalties assessed after January 15, 2024:
Failure to provide required disclosures: The penalty for not providing required ERISA disclosures has risen from $2,194 to $2,367 per day.
Failure to comply with blackout period requirements: The fine for violating blackout period requirements has increased from $139 to $151 per day.
Failure to file Form 5500: The penalty for not promptly filing Form 5500, the annual report of employee benefit plans, has gone up from $2,259 to $2,447 per day.
Next Steps
The DOL’s decision to increase penalties for certain ERISA violations emphasizes the importance of complying with federal regulations for employee benefit plans. Employers must understand the potential impact and proactively take measures to ensure compliance. To minimize the impact of the higher penalties, employers should:
Keep up to date on ERISA regulations and penalties by reviewing DOL guidance regularly.
Conduct a thorough internal review of ERISA compliance procedures, ensuring accurate and timely submission of all documentation, disclosures, and filings.
Consider hiring legal counsel or ERISA compliance experts for in-depth audits and guidance on best practices.
Educate employees on their rights under ERISA, including benefit plans, disclosures, and any changes to help prevent violations due to misunderstandings or lack of awareness.
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