Department of Labor Announces Annual Adjustments to Several Retirement Plan Penalties:


The U.S. Department of Labor (“DOL”) recently published annual guidance adjusting certain penalties that can affect qualified retirement plans. This guidance was published pursuant to a 2015 federal law, which required various government agencies to make annual inflation adjustments to certain civil monetary penalties.

This DOL guidance is effective as of January 23, 2019. Thus, its increased penalty levels apply to any penalties assessed after that date, with respect to violations that occurred after November 2, 2015. Here is a summary of the most common penalties that can apply to qualified retirement plans under this guidance, with the inflation adjustments for 2019:

  • Failure or refusal to file Form 5500:  The maximum penalty will increase from $2,140.00 per day to $2,194.00 per day.
  • Failure to provide blackout notice:  The maximum penalty will increase from $136.00 per day to $139.00 per day for each failure.
  • Failure to provide notice of rights and obligations under an automatic contribution arrangement:  The maximum penalty will increase from $1,693.00 to $1,736.00 per day.

Although these penalties can be substantial, the DOL is not required to assess the maximum penalties provided in this guidance. Rather, the DOL has discretion to assess lower penalties, based mainly on plan sponsors’ conduct (e.g., the degree of effort that the plan sponsor applied when attempting to comply with these requirements).

You can access this guidance via the following link: