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5500 Preparer's Manual for 2012 Plan Years

5500 Preparer's Manual for 2012 Plan Years
The premier resource in the field of Form 5500 preparation, 5500 Preparer's Manual will help you handle the required annual Form 5500 filings for both pension benefits and welfare benefit plans.


Proposed regs issued on civil penalties for noncompliance with ERISA disclosure rules

The Employee Benefits Security Administration (EBSA) has issued proposed regulations on the assessment of civil penalties under ERISA 502(c) (4) for the failure to disclose certain documents to participants, beneficiaries and others as required by ERISA. The proposed regulations reflect amendments to ERISA by the Pension Protection Act of 2006 (PPA; P.L. 109-280).

Disclosure penalties authorized

The PPA amended the civil enforcement provisions of ERISA for plan years beginning on or after January 1, 2008. Under the new disclosure requirement of ERISA 101(j), the plan administrator of a single-employer defined benefit plan must provide participants and beneficiaries with written notice of limitations on benefits and benefit accruals within 30 days after the plan becomes subject to ERISA 206(g) funding-based restrictions.

Under new ERISA 101(k), the plan administrator of a multiemployer pension plan must, upon written request, furnish certain documents to plan participants, beneficiaries, employee representatives, or contributing employers. Similarly, under new ERISA 101(l), contributing employers must be provided with notice of potential withdrawal liability. In addition, under ERISA 514(e)(3) , plans with automatic contribution arrangements must provide notice of the participants’ rights and obligations under the arrangement.

The Secretary of Labor may assess penalties of up to $1,000 per day for failure to provide the disclosures within 30 days after they become due under the provisions.

Time limits for notices and contests of assessed penalties

The proposed regulations explain how the maximum penalty amounts are computed, identifies the circumstances under which penalties are assessed, sets forth certain procedural rules for service and filing, and provides a plan administrator a means to contest a penalty assessment by requesting an administrative hearing.

The regulations require the DOL to provide the plan administrator with written notice of its intent to assess a penalty, and the reasons therefore, and detail the amount of the penalty, the number of participants and beneficiaries upon which it is based, and the period to which it applies. The regulations also permit the DOL to waive part or all of the penalty upon a showing by the plan administrator, within 30 days of receiving notice of the violation, of compliance or mitigating circumstances for noncompliance.

The failure by a plan administrator to timely file a statement contesting the alleged violations is deemed by the regulations to be a waiver of the right to appear and contest the penalty for purposes of any adjudicatory proceeding. The regulations set forth the rules and time limits for the service of notice of intent to assess a penalty, and statements of reasonable cause. (Requests for hearings are covered by separate administrative rules).

The regulations further specify that if more than one person as administrator is responsible for the disclosure failure, all such persons shall be jointly and severally liable. The regulations further provide that liability for payment of the penalty lies with the person against whom a penalty is assessed and not the plan itself.

Comments sought by February 19, 2008

Written comments, identified by “RIN 1210– AB24,” should be received no later than February 19, 2008 and directed to: Office of Regulations and Interpretations, Employee Benefits Security Administration, Room N–5669, U.S. Department of Labor, 200 Constitution Avenue, NW, Washington, DC 20210, Attention: Civil Penalties Under 502(c)(4); or at web site www.; or by e-mail addressed to

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