FR Doc. 97-18078

[Federal Register: July 10, 1997 (Volume 62, Number 132)]
[Rules and Regulations]
[Page 36993-36995]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr10jy97-8]

=======================
-----------------------

PENSION BENEFIT GUARANTY CORPORATION

29 CFR Parts 4000, 4010, 4011, 4043, 4071, and 4302

RIN 1212-AA86

Adjustment of Civil Monetary Penalties for Inflation

AGENCY: Pension Benefit Guaranty Corporation.
ACTION: Final rule.
--------------------------
SUMMARY: This final rule adjusts for inflation the maximum amount specified in two civil monetary penalty provisions, as required by the Debt Collection Improvement Act of 1996. The maximum daily penalties under sections 4071 and 4302 of the Employee Retirement Income Security Act of 1974 are adjusted, respectively, from $1,000 to $1,100 and from $100 to $110.

EFFECTIVE DATE: This rule is effective August 11, 1997, and is applicable to violations (including continuing violations) that occur after that date.

FOR FURTHER INFORMATION CONTACT: Harold J. Ashner, Assistant General Counsel, or Marc L. Jordan, Attorney, Office of the General Counsel, Suite 340, 1200 K Street, NW., Washington, DC 20005, 202-326-4024 (202- 326-4179 for TTY and TDD). (These are not toll-free numbers.)

SUPPLEMENTARY INFORMATION: The Debt Collection Improvement Act of 1996 amended the Federal Civil Monetary Penalty Inflation Adjustment Act of 1990 to require Federal agencies to regularly adjust certain civil monetary penalties for inflation. Agencies must increase the maximum amounts of civil monetary penalties by an initial cost-of-living adjustment and make further adjustments at least once every four years thereafter.

The cost-of-living adjustment is defined as the percentage by which the Consumer Price Index (CPI) for June of the calendar year preceding the adjustment exceeds the CPI for the month of June of the calendar year in which the amount of the civil monetary penalty was last set or adjusted. The calculated increase is subject to a specific rounding formula and a ten percent limitation for the initial adjustment.

Section 4071 of the Employee Retirement Income Security Act of 1974 (ERISA) authorizes the PBGC to assess a penalty against any person who fails to provide any notice or other material information required under various statutory or regulatory provisions within

[[Page 36994]]

the applicable specified time limit. The maximum amount of the penalty, which was last set when it was established by law in 1987, is $1,000 per day for each day the failure continues. This final rule adds to the PBGC's regulations a new Part 4071 that provides that the maximum amount of the penalty under ERISA section 4071 will be $1,100.

Section 4302 of ERISA provides that a person who fails, without reasonable cause, to provide a notice required under Subtitle E of Title IV of ERISA (``Special Provisions for Multiemployer Plans'') or any implementing regulations is liable to the PBGC for a penalty. The maximum amount of the penalty, which was last set when it was established by law in 1980, is $100 per day for each day the failure continues. This final rule adds to the PBGC's regulations a new Part 4302 that provides that the maximum amount of the penalty under ERISA section 4302 will be $110.

This rule also amends three existing regulatory provisions that refer to PBGC assessment of penalties under ERISA 4071 of up to $1,000 per day for failures to provide certain notices or other information:

29 CFR 4010.13, dealing with annual financial and actuarial information;
29 CFR 4011.3, dealing with participant notices; and
29 CFR 4043.3, dealing with reportable event notices.

These provisions are amended to provide that the penalty assessed under ERISA section 4071 may not exceed $1,100 per day.

The PBGC has issued three recent policy statements dealing with the application of penalties under ERISA section 4071 (on July 18, 1995 (60 FR 36837), December 17, 1996 (61 FR 66338), and March 14, 1997 (62 FR 12521)). In applying those policy statements to violations occurring after the effective date of this final rule, the maximum assessable penalty referred to in the policy statements will be considered to be $1,100 rather than $1,000. (The guideline amounts in the July 18, 1995, policy statement remain unchanged.)

Compliance With Rulemaking Guidelines

The PBGC has determined that there is good cause for dispensing with notice and comment rulemaking as unnecessary. 5 U.S.C. 553(b). This rulemaking is required by the Debt Collection Improvement Act of 1996, and the PBGC has no discretion in determining the amount of the published adjustment. Accordingly, the PBGC is issuing this amendment as a final rule.

The PBGC has determined that this rule is not a ``significant regulatory action'' under the criteria set forth in Executive Order 12866.

Because no general notice of proposed rulemaking is required for this rulemaking, the Regulatory Flexibility Act does not apply (5 U.S.C. 601(2)).

List of Subjects

29 CFR Part 4000

Administrative practice and procedure.

29 CFR Parts 4010, 4011, and 4043

Penalties, Pension insurance, Pensions, Reporting and recordkeeping requirements.

29 CFR Parts 4071 and 4302

Penalties.

For the reasons set forth above, Chapter XL of Title 29 of the Code of Federal Regulations is amended as follows:

Subchapter K--[Redesignated]

1. Subchapter K Internal and Administrative Rules and Procedures (parts 4901--4907) is redesignated as ``Subchapter L--Internal and Administrative Rules and Procedures''.

PART 4000--FINDING AIDS

2-3. The authority citation for Part 4000 continues to read as follows:

Authority: 29 U.S.C. 1302(b)(3).

4. In Sec. 4000.2, the table ``Subchapter H--Enforcement Provisions'' is amended by adding a new entry after the entry for ``4068''; the table heading ``Subchapter K--Internal Administrative Rules and Procedures'' is revised to read ``Subchapter L--Internal Administrative Rules and Procedures''; and a new table ``Subchapter K-- Multiemployer Enforcement Provisions'' is added after the table ``Subchapter J--Insolvency, Reorganization, Termination, and Other Rules Applicable to Multiemployer Plans'', to read as follows:

Sec. 4000.2 Derivation table.

* * * * *

Ch. XL Part subpart/section(s) Ch. XXVI Part(s) subpart/section(s)

* * * * *
Subchapter H--Enforcement Provisions

* * * * *
4071...................................... [new]

* * * * *
Subchapter K--Multiemployer Enforcement Provisions

4301...................................... [new]

Subchapter L--Internal Administrative Rules and Procedures

* * * * *
PART 4010--ANNUAL FINANCIAL AND ACTUARIAL INFORMATION REPORTING

5. The authority citation for part 4010 continues to read as follows:

Authority: 29 U.S.C. 1302(b)(3), 1310.

Sec. 4010.13 [Amended]

6. Section 4010.13 is amended by removing the figure ``$1,000'' and adding in its place the figure ``$1,100.''

PART 4011--DISCLOSURE TO PARTICIPANTS

7. The authority citation for part 4011 continues to read as follows:

Authority: 29 U.S.C. 1302(b)(3), 1311.

Sec. 4011.3 [Amended]

8. In Sec. 4011.3, paragraph (c) is amended by removing the figure ``$1,000'' and adding in its place the figure ``$1,100.''

PART 4043--REPORTABLE EVENTS AND CERTAIN OTHER NOTIFICATION REQUIREMENTS

9. The authority citation for part 4043 continues to read as follows:

Authority: 29 U.S.C. 1082(f), 1302(b)(3), 1343.

Sec. 4043.3 [Amended]

10. In Sec. 4043.3, paragraph (e) is amended by removing the figure ``$1,000'' and adding in its place the figure ``$1,100.''

11. Part 4071 is added to subchapter H to read as follows:

PART 4071--PENALTIES FOR FAILURE TO PROVIDE CERTAIN NOTICES OR OTHER MATERIAL INFORMATION:

Sec.
4071.1 Purpose and scope.
4071.2 Definitions.
4071.3 Penalty amount.

Authority: 28 U.S.C. 2461 note, as amended by sec. 31001(s)(1),
Pub.L. 104-134, 110 Stat. 1321-373; 29 U.S.C. 1302(b)(3), 1371.

Sec. 4071.1 Purpose and scope.

This part specifies the maximum daily amount of penalties that may be assessed by the PBGC under ERISA section 4071 for certain failures to provide notices or other material

[[Page 36995]]

information, as such amount has been adjusted to account for inflation pursuant to the Federal Civil Monetary Penalty Inflation Adjustment Act of 1990, as amended by the Debt Collection Improvement Act of 1996.

Sec. 4071.2 Definitions.

The following terms are defined in Sec. 4001.2 of this chapter: ERISA and PBGC.

Sec. 4071.3 Penalty amount.

The maximum daily amount of the penalty under section 4071 of ERISA shall be $1,100.
12. A new subchapter K consisting of part 4302 is added to read as follows:

Subchapter K--Multiemployer Enforcement Provisions

PART 4302--PENALTIES FOR FAILURE TO PROVIDE CERTAIN MULTIEMPLOYER PLAN NOTICES

Sec.
4302.1 Purpose and scope.
4302.2 Definitions.
4302.3 Penalty amount.

Authority: 28 U.S.C. 2461 note, as amended by sec. 31001(s)(1),
Pub.L. 104-134, 110 Stat. 1321-373; 29 U.S.C. 1302(b)(3), 1452.

Sec. 4302.1 Purpose and scope.

This part specifies the maximum daily amount of penalties for which a person may be liable to the PBGC under ERISA section 4302 for certain failures to provide multiemployer plan notices, as such amount has been adjusted to account for inflation pursuant to the Federal Civil Monetary Penalty Inflation Adjustment Act of 1990, as amended by the Debt Collection Improvement Act of 1996.

Sec. 4302.2 Definitions.

The following terms are defined in Sec. 4001.2 of this chapter: ERISA, multiemployer plan, and PBGC.

Sec. 4302.3 Penalty amount.

The maximum daily amount of the penalty under section 4302 of ERISA shall be $110.

Issued in Washington, DC, this 3rd day of July, 1997.

John Seal,
Acting Executive Director, Pension Benefit Guaranty Corporation.
[FR Doc. 97-18078 Filed 7-9-97; 8:45 am]
BILLING CODE 7708-01-P