2023 Inflation Adjustments for Civil Penalties

The Department of Labor has published in the Federal Register several inflation-adjusted penalty amounts for certain failures associated with qualified retirement plans.

• Per day, for failure to properly file a plan annual report (Form 5500 series); penalty rises from $2,400 to $2,586
• Per day, for failure to properly provide a plan black-out notice, or notice of right to divest employer securities (each recipient being a separate failure); penalty rises from $152 to $164
• Per day, for failure to provide DOL-requested documents; penalty increases from $171 to $184 (not to exceed $1,846 per request)
• Failure to properly provide benefit statements and maintain records vis-à-vis former participants and beneficiaries; penalty rises from $33 to $36 per required statement
• Failure of a fiduciary to comply with the prohibition on certain types of distributions from defined benefit pension plans with certain liquidity shortfalls; maximum penalty rises from $18,500 to $19,933 (penalty will be the amount of any distribution, if less)

Additionally, penalty amounts for certain failures associated with group health plans have been updated as follows.

• Failure to provide the Summary of Benefits and Coverage (“SBC”); penalty rises from $1,264 to $1,362 per failure
• Failure to comply with the Genetic Information Nondiscrimination Act (GINA), and failure to comply with disclosure requirements under Medicaid or the Children’s Health Insurance Program (CHIP); penalty rises from $127 to $137 per participant, per day
• Failure to meet filing requirements for multiple employer welfare arrangements (MEWA); penalty increases from $1,746 to $1,881 per day

These adjustments for 2023 are made under the authority of the Federal Civil Penalties Inflation Adjustment Act and are in effect for any of the described penalties that are assessed after January 15, 2023.