Adjustment of Civil Penalties for Inflation

• Published date: 08 January 2025
• FR Document: 2025-00211
• Citation: 90 FR 1374
• Pages: 1374-1375
• Section: Rules and Regulations
• Issuer: Pension Benefit Guaranty Corporation

Federal Register, Volume 90 Issue 5 (Wednesday, January 8, 2025)

[Federal Register Volume 90, Number 5 (Wednesday, January 8, 2025)]
                [Rules and Regulations]
                [Pages 1374-1375]
                From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
                [FR Doc No: 2025-00211]
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                PENSION BENEFIT GUARANTY CORPORATION
                29 CFR Parts 4071 and 4302
                RIN 1212-AB45
                Adjustment of Civil Penalties for Inflation
                AGENCY: Pension Benefit Guaranty Corporation.
                ACTION: Final rule.
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                SUMMARY: The Pension Benefit Guaranty Corporation is required to amend
                its regulations annually to adjust for inflation the maximum civil
                penalty for failure to provide certain notices or other material
                information and for failure to provide certain multiemployer plan
                notices.
                DATES:
                 Effective date: This rule is effective January 8, 2025.
                 Applicability date: The increases in the civil monetary penalties
                under sections 4071 and 4302 of the Employee Retirement Income Security
                Act provided for in this rule apply to such penalties assessed after
                January 8, 2025.
                FOR FURTHER INFORMATION CONTACT: Karen Levin ([email protected]),
                Attorney, Regulatory Affairs Division, Pension Benefit Guaranty
                Corporation, 445 12th Street SW, Washington, DC 20024-2101; 202-229-
                3559. If you are deaf or hard of hearing or have a speech disability,
                please dial 7-1-1 to access telecommunications relay services.
                SUPPLEMENTARY INFORMATION:
                Executive Summary
                Purpose of the Regulatory Action
                 This rule is needed to carry out the requirements of the Federal
                Civil Penalties Inflation Adjustment Act Improvements Act of 2015 and
                Office of Management and Budget guidance M-25-02. The rule adjusts, as
                required for 2025, the maximum civil penalties under 29 CFR 4071 and 29
                CFR 4302 that the Pension Benefit Guaranty Corporation (PBGC) may
                assess for failure to provide certain notices or other material
                information and certain multiemployer plan notices. PBGC's legal
                authority for this action comes from the Federal Civil Penalties
                Inflation Adjustment Act of 1990 as amended by the Federal Civil
                Penalties Inflation Adjustment Act Improvements Act of 2015 and from
                sections 4002(b)(3), 4071, and 4302 of the Employee Retirement Income
                Security Act of 1974 (ERISA).
                Major Provisions of the Regulatory Action
                 This rule adjusts as required by law the maximum civil penalties
                that PBGC may assess under sections 4071 and 4302 of ERISA. The new
                maximum amounts are $2,739 for section 4071 penalties and $365 for
                section 4302 penalties.
                Background
                 PBGC administers title IV of ERISA. Title IV has two provisions
                that authorize PBGC to assess civil monetary penalties.\1\ Section
                4302, added to ERISA by the Multiemployer Pension Plan Amendments Act
                of 1980, authorizes PBGC to assess a civil penalty of up to $100 a day
                for failure to provide a notice under subtitle E of title IV of ERISA
                (dealing with multiemployer plans). Section 4071, added to ERISA by the
                Omnibus Budget Reconciliation Act of 1987, authorizes PBGC to assess a
                civil penalty of up to $1,000 a day for failure to provide a notice or
                other material information under subtitles A, B, and C of title IV and
                sections 303(k)(4) and 306(g)(4) of title I of ERISA.
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                 \1\ Under the Federal Civil Penalties Inflation Adjustment Act
                of 1990, a penalty is a civil monetary penalty if (among other
                things) it is for a specific monetary amount or has a maximum amount
                specified by Federal law. Title IV also provides (in section 4007)
                for penalties for late payment of premiums, but those penalties are
                neither in a specified amount nor subject to a specified maximum
                amount.
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                Adjustment of Civil Penalties
                 The Federal Civil Penalties Inflation Adjustment Act Improvements
                Act of 2015,\2\ requires agencies to adjust civil monetary penalties
                for inflation and to publish the adjustments in the Federal Register.
                An initial adjustment was required to be made by interim final rule
                published by July 1, 2016, and effective by August 1, 2016. Subsequent
                adjustments must be published by January 15 each year after 2016.
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                 \2\ Sec. 701, Public Law 114-74, 129 Stat. 599-601 (Bipartisan
                Budget Act of 2015).
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                 On December 17, 2024, the Office of Management and Budget issued
                memorandum M-25-02 on implementation of the 2025 annual inflation
                adjustment.\3\ The memorandum provides agencies with the cost-of-living
                adjustment multiplier for 2025, which is based on the Consumer Price
                Index (CPI-U) for the month of October 2024, not seasonally adjusted.
                The multiplier for 2025 is 1.02598. The adjusted maximum amounts are
                $2,739 for section 4071 penalties and $365 for section 4302 penalties.
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                 \3\ See M-25-02, Implementation of Penalty Inflation Adjustments
                for 2025, Pursuant to the Federal Civil Penalties Inflation
                Adjustment Act Improvements Act of 2015, https://www.whitehouse.gov/wp-content/uploads/2024/12/M-25-02.pdf.
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                Compliance With Regulatory Requirements
                 The Office of Management and Budget has determined that this rule
                is not a ``significant regulatory action'' under Executive Order 12866
                and therefore not subject to its review.
                 The Office of Management and Budget also has determined that notice
                and public comment on this final rule are unnecessary because the
                adjustment of civil penalties implemented in the rule is required by
                law. See 5 U.S.C. 553(b).
                 Because no general notice of proposed rulemaking is required for
                this rule, the Regulatory Flexibility Act of 1980 does not apply. See 5
                U.S.C. 601(2).
                List of Subjects
                29 CFR Part 4071
                 Penalties.
                29 CFR Part 4302
                 Penalties.
                 In consideration of the foregoing, PBGC amends 29 CFR parts 4071
                and 4302 as follows:
                PART 4071--PENALTIES FOR FAILURE TO PROVIDE CERTAIN NOTICES OR
                OTHER MATERIAL INFORMATION
                0
                1. The authority citation for part 4071 continues to read as follows:
                 Authority: 28 U.S.C. 2461 note, as amended by sec. 701, Pub. L.
                114-74, 129 Stat. 599-601; 29 U.S.C. 1302(b)(3), 1371.
                Sec. 4071.34071.3 [Amended]
                0
                2. In Sec. 4071.3, remove the number ``$2,670'' and add in its place
                the number ``$2,739''.
                PART 4302--PENALTIES FOR FAILURE TO PROVIDE CERTAIN MULTIEMPLOYER
                PLAN NOTICES
                0
                3. The authority citation for part 4302 continues to read as follows:
                 Authority: 28 U.S.C. 2461 note, as amended by sec. 701, Pub. L.
                114-74, 129 Stat. 599-601; 29 U.S.C. 1302(b)(3), 1452.
                Sec. 4302.34302.3 [Amended]
                0
                4. In Sec. 4302.3, remove the number ``$356'' and add in its place the
                number ``$365''.
                [[Page 1375]]
                 Issued in Washington, DC, by
                Ann Y. Orr,
                Acting Director, Pension Benefit Guaranty Corporation.
                [FR Doc. 2025-00211 Filed 1-7-25; 8:45 am]
                BILLING CODE 7709-02-P